The home is the biggest asset in terms of value that most people possess. Therefore, a home insurance policy is one of the most important insurance policies that you will be buying. If you do not adequately insure your home, any damage caused to it could have a devastating effect on you. In addition, a home is very important because of the emotional attachment and the sense of stability that it provides. The main reason as to why you purchase a home insurance is to cover the cost of rebuilding it, if it is destroyed partly completely. Moreover, you can choose to cover the contents of your home with the home insurance.
You can easily purchase the wrong cover by incorrectly estimating the rebuilding costs or underestimating the worth of the contents of the home. Here are the top nine things that you must consider when buying home insurance.
Decide what you want to insure
Some things have great financial value, while others are just of sentimental value. Make a checklist of things you want to be able to replace, and those you can do without. Also, to ensure you’re not paying for cover for things you don’t use, why not go through your things and sell any unwanted electrical items, cds, DVDs, phones etc. to help bring the cost of your premium down.
Be clear as to what items in the home are covered by the policy
Many people are shocked when they suddenly find out that their bicycle stolen from the backyard is not covered because they have not paid extra to get it covered. Some others may not realize that most policies cover items when they are away from home.
How to reduce the cost
One way you can reduce the cost is by choosing a higher excess, the amount paid before the insurance becomes effective. However, you will have to get the home weighed up as a high or low risk property. The other option is to improve your home’s security by fixing a burglar alarm, additional locks, etc. If there have been no claim during the previous year, it also helps to bring down premium at the time of renewal. Stopping smoking also helps to reduce cost.
It is a good idea to maintain photos of the contents of your home in the places where they are normally kept. Further, keep the receipts of all those items that you think are valuable.
Correctly estimate the value of the items in your home
Study thoroughly as to what contents of your home carry a heavy replacement cost.
Make correct re-build estimates
If you are not clear as to how much the complete rebuilding of your home would cost, find out a builder who can provide a free estimate.
Annual built-in increases
Most insurance companies automatically increase the value by 3% or as much as the inflation rate, whichever is higher. This will be indicated in small print. Be aware of this as they can add up over the years. Therefore, it is best that you shop around a little during renewal time.
Do not keep anything outside your home’s main part
Unless you have made arrangements for special cover for things kept outside the main building, you will not be paid anything if things kept in sheds, outhouses and garages are stolen.
Remember to add new items that you purchase at the time of renewing your home insurance policy. Also, check with your insurer if something valuable that you have acquired needs special insurance.