Home insurance policy

Most of people in the world dream of owning a house. A dream home in which, the entire family can live in peace and happiness. To realize this, we invest our life-long savings or take a high value mortgage loan. No matter how you buy a home, it is always imperative to insure it against future risks and threats, which often come without invitation. Besides man-made disasters like fire, explosions, burglary etc., natural catastrophes like cyclones and earthquakes can also create considerable threat to your dream abode. That s where a Home Insurance Policy comes into play and allows you to rest in peace.

What is a home insurance policy

A home insurance policy, as the name suggests is an insurance policy provided by insurers to cover the damages caused, arisen due to man-made and natural calamities. The Home Insurance Policy are also referred as hazard insurance or homeowners insurance ; in some parts of the world.

Coverage under home insurance policies

There are various types of Home Insurance Policy available in the market but generally, they cover broadly two things : Building and the contents inside the home.

The insurance for a building structure may cover damages due to fire, flood, storm, explosions, bush fire, lightening, riots, and damages caused due impact of vehicles. With many people losing their houses due to terrorist activities and aircraft crashes, some insurance companies have also brought damages due to terrorism and aircraft crashes under the ambit of home insurance policies .

The insurance policy for contents inside the home covers household items such as furniture, jewelry, electronic items and electronic goods. The insurance policy will cover the damages of abovementioned items due to fire, earthquake, theft or an attempt of burglary.

To insure your home against any possible perils, you need to contact the home insurance provider in your area. With home insurance policies getting very popular, almost all general insurance companies provide home insurance plans. As per the value of your home and the amount covered, you need to pay a premium amount. The premium is calculated on the basis of number of factors like :-

  • Property value in your locality
  • Cost of building the home
  • The age of the building
  • The risk associated with the house
  • This premium amount can be paid monthly, quarterly, half-yearly and annually depending upon your convenience and the facilities offered by the insurer. The home insurance policy is usually a term contract which means your house is insured till you are paying the premium amount. The term usually is of minimum 1 year and can be extended as desired.

    What factors should be considered while purchasing a home insurance policy

    Whether you are buying an insurance policy or any other product, there are number of factors which, when considered, can help you get optimum value out of it. While insuring your home, you can consider the following things:-

  • To begin with, decide on the amount and type of insurance policy you want to purchase. Take a decision on whether you want to insure your building structure or the contents inside the home or both. Also, determine the amount of home insurance coverage, you need. Consulting your family members and friends while deciding on the coverage can help you take a correct decision.
  • Secondly, determine which, if any, additional protection endorsements like terrorism and aircraft crashes you would like to add to your home insurance policy. Evaluate the risk associated with your house. Is your property in a violent-prone area The answer to this and many such questions will help you decide on the required additional endorsements.
  • Once you have decided on the type of coverage you want in your home insurance policy, you now need to decide on the insurer you would like to buy the insurance policy from. Search on the Internet and visit insurers websites. Talk to your friends and neighbors who already have their home insured and decide on the company you want to deal with. It is always advisable to buy a home insurance policy from a reputed insurer who has a good track record in the business.
  • How to lower the premium amount of Home Insurance Policy

    If you want to avail a low cost home insurance policy then, you need to shop around in the market and look for various options available with insurers in the market. It has been noted that, the quotes of home insurance companies vary by a huge margin for the same amount of coverage on the same house. These may happen due to business policies and risk perception of each insurance company. While, requesting for the quote, make sure that each insurance company is offering the same coverage amount and on same conditions. Many insurance companies offer discount to their existing customers. So, do check out with the company you have insured your car or have a personal insurance plan with. Some insurance companies also offer a discount if you insure both your building and its contents.

    How to make an insurance claim

    Insurance policies are contracts between policy owner and the insurer which is subject to certain conditions and clauses. You as a policy owner is expected and required to perform certain duties, in case of, any eventuality. Any act of non-compliance or failure to perform these duties may result in non-payment of claim by the insurance company.

    Here is a checklist of duties to be performed by policy owners which, most insurance providers include in their policy agreement:

    (1) As soon as the damage is discovered, communicate it to the insurance company;

    (2) Protect the house and its contents from further damages which mean if the fire is set in your house, you are expected to call the fire brigade as soon as possible ;

    (3) Prepare a list of the items damaged with their description and extent of damage;

    (4) File a report to the local police in cases of theft and burglary;

    Adherence to above duties and following the other conditions of your home insurance policy will insure a timely disbursal of your claim amount.

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