Custom Search

The Basics Of Home Insurance

Home insurance cover comes in two types. The first one is home contents insurance, which is optional and you can decide if you want to take it or not. The second one is buildings insurance, which is something you might be forced to take by your mortgage lender so that the buildings and all its fixtures and fittings are covered. Both types of home insurance can help you immensely if any catastrophic damage occurs like a fire or a flood.

Things inside contents insurance:

Contents home insurance covers all your belongings that you would take if you shift to a new home. This in essence refers to all your household belongings and the insured needs to make sure he/she takes into account all the possessions he needs to insure and add it to the policy before the policy is finalized.

When you take home contents insurance, you will most probably be covered from damage caused by fire, water, vandalism, theft and floods. Also, some insurance providers give you cover from accidental damage that things such as your television, mirrors, carpets etc face. However, know that not all insurance agencies cover accidental damage. You will generally have to pay extra if you want such cover.

Things inside buildings insurance:

The type of home insurance that covers the exterior (shell) of your home in case your home is destroyed is known as buildings insurance. If a calamity were to take place, your insurance agency will reimburse the costs needed to build a brand new home as well as the costs required to clear the debris and prepare the site for rebuilding. Apart from covering the home exterior, this type of insurance also covers those things inside your home that are immovable. Such things are kitchen cabinets, bathroom fittings etc.

Most of the time, but not always, you will be covered from damage caused by fire, storm, flooding, theft, structural and subsidence. However, the fine print of the policy can include exclusions and limitations so make sure you go through the fine print carefully before you sign the paper.

How to save money on home insurance premiums:

You can reduce your monthly insurance premiums by paying a greater ‘deductible'. A deductible is the amount of money you pay after the damage to your home or its belongings for getting things ready etc before the insurer can cover the rest of the claim. Though they might be a minimum amount of ‘deductible' you have to pay towards the claim, there is no maximum limit on how much you should pay. However, one negative aspect of this is that you will need ready money equal to the deductible you promised at the time of damage if a claim needs to be honored. If you have more than one claim and have a high deductible, then all the money you saved while paying low premiums will be lost.

Also, installing security devices such as alarms etc around your house helps lower the monthly insurance premiums.