When you have decided to purchase a new house for yourself for the first time; you have plenty of new and exciting things to think about. Thinking and deciding about home insurance is probably the last thing that runs through your mind. However, like all things; it is also a crucial element that must not be ignored and given equal priority.
Why is Home Insurance Important?
Even a small house or an apartment attracts a significant investment on your part. Your home, by default, is exposed to various risks like damage due to earthquakes, sudden fire, robbery or any other such unfortunate events. Home insurance protects you from additional massive financial expenses in case your home becomes a victim of any such untoward incidences. Moreover, it helps to procure a home loan for your house way easier. Many loan providers make home insurance a mandatory requirement before approving your loan.
Guidelines to Choosing Good Home Insurance
After establishing the importance of home insurance; we now move to the next important part of choosing a good home insurance. With plenty of home insurance plans available; the following guiding points and considerations would help you nail the right home insurance policy.
- Shop around and research
The first step is to know about all your options. Thus, you do need to do your homework. You must learn about various home policies from different companies online, from the insurance provider representatives; from friends and families and just about any source that becomes available to you. While researching, you must pay close attention to variations in coverage, limits, deductibles and even the exclusions. For instance, a particular home policy might not provide protection against earthquake, infestations, general wear and tear, flooding, etc.
Compare the price of the policy with the extent of coverage provided. The cheapest policy might not be worthwhile. It is a smarter move to pay a little extra and get a policy that provides comprehensive coverage.
- Enquire about discounts
Most insurance companies do offer attractive discounts though it is often not advertised. You would only know about it when you specifically ask for it. Another discount option is when you are buying multiple insurance policies from the same company. For instance, you can purchase your vehicle as well as home insurance from the same company. This makes you a VIP customer, and you procure some exclusive discounts. Knowing all about your discount options helps you lower your premium amount significantly.
- Compare deductibles
Most home insurance policies have a deductible which means the amount that you must pay from your pocket on each claim. The deductible should be an amount that you can afford to pay effortlessly at any point in time. It is also noteworthy that the deductible amount impacts your premium amount to a high degree. A higher deductible means a lower premium.
- Research the insurance company’s financial strength
It is vital that you choose an insurance company that can meet all its financial obligations at the time of claim settlement. You might be left high and dry if the selected insurance company is going through a rough patch and is unable to pay you the claim amount. An insight into this can be obtained from the company’s claim settlement speed and percent as well as its customer service. Any reputable and credible insurance company would always give a friendly and helpful treatment to all its clients. The excellent behavior would reflect in positive customer reviews about the brand online at various portals especially the neutral ones.
- Know the extent of coverage you need for your home
Typically, a higher coverage implies that you need to pay less if any unfortunate incident occurs. Many times, your lender plays a pivotal role in deciding the extent of coverage you need. It best to talk to representatives of various insurance companies and get a fair idea of the scope of coverage you would need for your home.
- Answer all questions correctly and truthfully
A home insurance involves a lengthy application process because of plenty of factors involved. The age of your home; the material used to build it; the state of the home’s primary systems like the sewage, water piping, electrical; the level of security and protective systems installed like security cameras; earthquake and lighting proof features, etc. While filling out your home insurance application form; you must fill in all details correctly and avoid all kinds of guesswork. You must bear in mind that any incorrect information might render your policy null and void at the time of making claims.
Wrapping up
It is almost impossible to rate one home insurance policy as the best and the other not so good. The best policy is one that meets your requirements to the maximum. Since these vary between individuals, the most appropriate home insurance would also change. With the above-mentioned guidelines; you would be able to nail the best home insurance policy for your home.
