3 Key Considerations When Choosing Home Insurance

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Insurance is a cover to protect the things you love. Image from http://salonreadaptation.ca/

Few things are as costly and as valued as owning a house. Any number of things could happen to your prized asset including but not limited to theft, fire, natural disasters, and more. With life so full of uncertainties and misfortune, it is vital to get home insurance to protect not only your investment but also the roof over you and your family’s heads. Home insurance policies usually cover destruction and damage to a residence’s interior and exterior, the loss or theft of possessions as well as personal liability for harm to others. Here are some considerations when choosing home insurance for your home.

1. Contents and Building Insurance

There are two types of home insurance, one that covers the contents of the home and the other that covers the building. You can buy them separately or as part of one policy. It is usually cheaper to buy both as part of one policy instead of two separate ones but obviously more costly overall than just opting for one or the other.

Contents insurance covers what’s inside the house including furniture, fittings, electronics and appliances along with other personal possessions.

Buildings insurance covers the structure itself including gates, fences and secondary structures like garages.

Standard home insurance includes liability coverage. This means that you are covered in case a visitor is injured while on your property and makes a claim or files a lawsuit against you. It also kicks in when a member of your family including a child causes damage to the property unintentionally. It even covers pets, so in the event that your dog bites your neighbour, your insurer will cover the medical expenses.

2. Focus on the specifics and make no assumptions

You need to be sure about what is actually covered by your policy. Damage from natural disasters, fire and water damage are common inclusions, however, you should make no assumptions and confirm the same from your provider. Home insurance policies cover accidental damage and any losses incurred when a burglar hits your home. Flooding, earthquakes, mould and sewage are also covered in some cases but may increase your premiums. In some cases, there are separate insurance policies for disasters like flooding and earthquakes. If you’re in a flood-prone area or an earth-quale prone area it may be fiscally wise to get coverage that includes that.

Check the fine print about what voids your cover and what is not covered altogether. For example if you rent out your property through services like Airbnb, are you still covered if accidents happen? This is a grey area and some insurance policies may not cover that because even though they are guests in your home, you are using your house as a business.

3. Compare and contrast

Contact multiple companies and compare coverage, price, processing of claims and customer service reviews. Don’t be too focused on getting the most low-cost option, focus instead on the value for money. Because you will deal with the insurance company during a disaster, you should really focus on the reviews especially those regarding customer service. Great customer service is crucial in a crisis.

What are the specifics when it comes to how much they will cover and any limits on repayment in the event of loss or damage? What are the different procedures for filing for a claim? Does the company make it easy or difficult to file? Once again, this will be happening at a difficult time, so a company that makes you deliberately jump through multiple hoops just to claim what is yours should automatically be out. Pick one that has a track record of settling claims fairly and in a timely fashion. Get timetables and make the agent explain the procedure in detail.

You also need to research the company itself and determine if it is financially solid. The research will also help you determine how much coverage you actually need based on different quotes. This will keep you from paying for more than you need.

 Home insurance contrary to popular belief is not a luxury. It is a crucial step towards protecting your home and your possessions. It is also not always a choice as with getting a mortgage where lenders require the buyer to get homeowners insurance. As you do your research, talk to a real person going beyond online research. Speak to insurance agents who deal with multiple companies not just employees of specific companies who are beholden to the employer and have a financial stake in your choice. Don’t be pressured to rush into an agreement, take your time. Happy hunting!

 As you reflect on the merits of home insurance, here’s a great piece on 6 insurance products you should consider. If you are a landlord you should also think about getting Is Landlord Insurance Worth It? These 5 Benefits Might Encourage You To Get One

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