Home is described as the place where our heart resides. The way our heart needs care, the same care and affection are required by your homes. This is done in the form of proper maintenance and making our best efforts in keeping our home clean and well maintained. But consider a time when there’s a leakage within the house and the cost of repairing is a lot more than expected.
To avoid such a situation, there calls a need to secure our home with home insurance. The way life insurance covers all our medical assistance, the home insurance covers all the factors for securing our home from various calamities or other damaging factors.
A home insurance cover not only helps to protect our home from damages, but it also protects the essentials in the house. It acts as an essential protection against risks from the financial damages caused due to natural calamities like fire, floods, earthquake, landslides, etc. and all the risks involving the loss of personal property due to theft, strikes, etc. Not only this, certain policies even cover household items like furniture, refrigerator, television, clothes, jewelry, and air-conditioner, etc.
Within the market, there are several customized plan built to fulfill the requirements of the customers. Depending on the requirement, the insurance policy covers all the assets within the house or just the house. Depending on all the requirements, the price of home insurance is also selected.
Based on the type of coverage, home insurance is divided into:
This type of insurance insures the building’s structure against all the man-made and natural calamities. The situations under which the insurer pays are:
- Damage caused due to riots, strike, etc.
- Damage caused due to natural calamities like cyclone, storm, earthquake, flood, tsunami, etc.
- Due to third-party liability or personal accident
It offers coverage to all the objects or things inside the house. The items involve jewelry, electronics, furniture, etc. Coverage is provided against the following reasons:
- Loss incurred due to theft
- Damage caused due to fire, storm, etc
So, one might find interest in insuring his house for a tension-free tomorrow by protecting the home against all the natural calamities and man-made factors like theft, etc. Home insurance is mandatory and the owner of the house needs to be aware of all the factors and policies that affect the policy. After considering all the factors, the owner should opt for the most appropriate policy for him. Before selecting the policy, following consideration need to be noted.
How To Choose The Sum To Be Insured?
The value of the house is determined on the basis of three components, i.e. land, building, and locality costs. Insurance covers only the building cost. Consider the fact that the market value of your hose is $150000 and the building’s cost is only $60000. Then your policy will insure only $60000. A civil contractor will be responsible for telling the cost of construction and it varies from place to place.
Consider a natural calamity shredded off your home. If the person owns the land, then it’s quite easy to get the house built. If the person owns an apartment on the third floor of the society and his home falls completely because of the tsunami. Then in such a case, his home can be built only if the whole society had been insured.
Generally, there are two ways of buying home insurance. First way considers the market value, whereas the other works on the reinstatement basis. Moreover, market value is not the value at which our house would be sold. Whereas it’s the value of the house after factoring it in depreciation and the value can be depreciated at a rate of 2% per annum.
Reinstatement is the value for reconstructing the house. In this case, the insurer doesn’t cut the depreciation but settles the claim after the house gets reconstructed. Some of the insurers pay the partial payments to support for the reconstructing the house. It all eventually depends on the terms and conditions of the insurance provider.
Check If You Are Underinsured:
Well, this is an important perspective and generally remains unconsidered. Underinsured is the situation where the market value is higher and the owner has got his home insured at a lower cover. In such a situation, the policyholder underinsures himself. In such a situation, the insurance provider provides the claim on the insurance cover rather than the market value of the house. In order to avoid this, the policyholder needs to frequently check all the prices and accordingly insure his property.
How Much Does It Cost:
The home insurance solely caries on the basis of the policy opted and the value of the property. Moreover, it varies from place to place, so one needs to critically go through the terms and conditions in order to get the exact price for the home insurance.
Different companies have different claim procedure as described in their claim procedure. Generally, during the time of the claim, all the damaged goods are inspected and need to be verified with a proper declaration. This is an important step as the insurer may refuse to pay the claim if any of the deliverables and the requisite documents is unavailable. So one should clearly go through the claim procedure and opt for the claim accordingly.
In all, we have gone through the reason for insuring our home and the way my home can get insured. Further, we come to know regarding the different types of home insurance covering different terms and calculating the prior value of the property. One thing that we always need to keep in mind is the terms and conditions of the policy followed by the timely payments of the policy. Once the policyholder is on the right path by following all the terms and conditions, he can opt for the claim he had applied for.