A Complete Beginner’s Guide for Buying Home Insurance

Here’s a complete beginner’s guide for buying home insurance. Is investing in Home insurance a good idea? What do standard insurance packages include and what you should look for? Let’s get an answer to all these queries.

One of our most valuable assets under our possession has to be our home. It is a culmination of most of our dreams, and buying it is often a fun experience. However, the tricky part of the process is buying the correct homeowner’s insurance. Like any other industry, this has a lot of varied packages with different coverage as well.

It becomes difficult for newbies to decipher which package will suit them best. Questions like what the insurance package covers and what doesn’t is often seen to cloud the minds of consumers, making them take wrong decisions. In this article, let’s try to break it up and understand.

Is Investing in Home Insurance a Good Idea?

Our lives are beset with problems of different kinds. We can never outgrow problems as such. However, it doesn’t hurt to remain prepared for rainy days, does it? The long term investments that we make in our lifetime provides a cushion to all these problems.

There are some potential threats associated with our houses like theft, natural disasters, fire, etc. To combat all these mishaps, home insurance has been made. This is property insurance constructed to protect your house and possessions against damages like these. Having a good home insurance policy at the place, provides a sense of financial stability, necessary for our independent lives.

In lieu of a relatively minor amount paid in the form of payments, the insurers guarantee us to take care of the damages our house incurs.

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What do Standard Home Insurance Packages Cover?

It is high time we put some light on the most burning issue of: What does the home insurance cover and what it doesn’t?

1. Physical Structure:

The home insurance policy covers the dwelling of the house. The structure is protected against a variety of man made and natural disasters. Detached parts of the house, like sheds, etc. can also be reinstated under the coverage of home insurance.

2. Liability:

If there is any bodily damage incurred by the family of the homeowner, or there is any loss of the third party, the liability insurance covers them. All of the members of the family including pets come under this bracket. In cases of being sued away from your home, or having a tumultuous court case against, liability insurance has your back and reimburses the fees of the lawyers and all other settlements you are expected to pay.

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3. Protect Your Personal Property:

The furniture, decorations, art pieces, electronic gadgets are important to you, and we definitely hear you. All of these properties are taken care of under the purview of home insurance as well.

4. Added Living Expenses: 

In case it not possible for us to stay in our house anymore, living expenses like hotel rooms, eating and gas mileage is paid for as well, however within reason.

What do Insurances Commonly Not Cover?

Before placing our faith in any insurance company, we must know how to shop for home insurance to begin with. None of us would want our claims to be cancelled, so it’s best we engineer our expectations accordingly.

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  The list of things which insurance packages normally don’t cover are:

  • Few natural disasters like earthquakes, landslides, etc
  • Wear and tear problems
  • Damage to war or any nuclear fallout
  • Maintenance-related problems
  • Insect infestation

Important Points to Consider:

Here are sum crucial points that you must keep in mind while buying home insurance:

1. Be Sure about Your Sum Assured:

Choosing the correct sum assured is one of the most important steps in buying home insurance. Only for the sake of deducting the cost of premium buying an insurance with a lower sum assured can be counterproductive.

2. Don’t Shy Away from Asking:

Asking every small detail of the insurance plan is better than knowing about it later and suffering. There are millions of insurance plans out there, with their varied list of things which are covered and the ones which aren’t. Specific features, like coverage due to terrorism, etc. should also be inquired according to individual preferences.

3. Don’t Underestimate the Fine Print:

A lot of times consumers have been fooled because they didn’t read the fine print through. Whenever, it’s time to buy the insurance, a thorough reading of the document is necessary to check if it really has all the features the insurer claims.

4. Transparency is Key:

Disputed property can cause unending problems to you if you don’t come clean with them to your insurer. Renovations of accidents, and claims to disputed property can pass away from your hand only due to lack of communication. It is important we understand that and talk accordingly.

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5. Don’t Settle Before You Know Your Choices:

Like any other capitalistic industry, the insurance industry has a lot of options and one needs to check more than one insurance company to be sure about their needs. Comparative platforms are available on the internet very easily. Remember to check them out.

If you have interest in stocks, don’t forget to go through this Stock Market Basics Guide.

What are your thoughts on choosing a good home insurance policy? Feel free to discuss.

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