10 things you should know before buying home insurance

Buying life, health or car insurance seems like a good idea. But hand over the scene to home insurance and there aren’t many takers.

It is commendable that you have decided to purchase contents insurance. With the right arrangement, both your house and its contents are insured and your worries are taken away in the event of unfavorable and unforeseen circumstances.

Here we discuss 10 important points to keep in mind before purchasing home insurance.

1. Don’t settle for just any insurance company

The market has many insurance companies vying for your attention, giving you a wide variety of options. Then why choose the first home insurer to pitch for you?

Typically, you should shortlist three to four home insurance companies and then wisely choose the one with the strongest financial credibility.

2. Take the right call on cover

You must ensure that you are covered for the correct amount. Your insurance company usually determines how much coverage you need. But in the end you have to take the call, because it determines how much you have to pay in case of a calamity.

The better the coverage, the less you have to pay.

3. Choose the duration of your cover wisely

You typically have two choices: annual and multi-year coverage. Choose the annual cover if you want to review your insured amount every year to find out whether it meets your needs. Multi-year coverage, on the other hand, helps you get big discounts.

4. Protection for both home and contents

It is important that you know that both your home and your belongings can be protected by your home insurance policy. Ask your home insurer to offer you the best possible arrangement.

5. Home insurance covers a wide range of incidents

The insurance can cover a wide range of incidents, including burglary, fire, flood, earthquake, hurricane, landslide, lightning strike, explosion of hazardous materials, and so on. Knowing these cases will help you understand when to file claims.

6. The few who are not covered

If your property is illegal, you cannot make any claims. The insurance lapses if you or your domestic staff have been directly or indirectly involved in a loss-causing event.

7. The reconstruction value of your home is important

The insured amount is based on the rebuilding value of your home and not on the market value. The rebuilding value takes into account the costs incurred after damage. The value of the contents is based on the future depreciation value.

8. Quality of the insurer’s service is important

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You don’t want to be chasing your insurer the moment you lose or damage your home and belongings. The least you can expect is an understanding and friendly insurer to help you at such a time.

9. Your home insurance policy should be reviewed every year

Check with your insurer annually whether the sum insured is sufficient. Maybe you’ve renovated your house, added a room or opted for new insulation. These costs eventually add up and it is possible that your insured amount will be short.

10. Understand what’s in your home insurance policy

You need to know what is in your home insurance policy as it is an acknowledgment of your rights and obligations as an insurer. Be sure to keep it safe and handy for when you need it in the future.