Homeowner insurance protects one of your most important assets, your home, in the event of a mishap such as a flood, fire, subsidence, etc. To protect the value of your property, it is important that you adequately insure your house. Indeed, your mortgage provider may make it a condition of the mortgage that you have home insurance.
There are hundreds of home insurance providers to choose from; including specialist insurance companies and high street banks. Before getting quotes, though, it’s important to know what attributes to base your purchase decision upon.
The main differentiating factors to base your decision upon include:
1. Price. As with most purchasing decisions it pays to shop around. There can be quite a difference between the premiums that you will pay if you choose the market leading company compared to some other policies.
2. Policy coverage. It’s all very well getting a cheap policy but if you find that there are lots of things that it doesn’t cover, then that may totally negate any short-term savings in premium payments. Some things to look out for are whether outbuildings and garages are included? There may also be policy conditions such as the need for the house to be situated more than a quarter of a mile from the sea, lake, or river. It might be a bore to read the small print but a failure to do so may lead to some nasty surprises further down the line.
3. How much is the excess? Typically, most home insurance policies have an excess of 50 (equivalent to about $100). Excess is the amount you would contribute if and when you make a claim on your policy. Sometimes you can ask for a higher excess in return for lower premiums.
You also need to work out how much it is that you need to protect for? The key thing to remember, here, is that you should insure for the rebuild cost of your house, not how much it’s worth or how much you paid for it. The reason for this is that if your house should happen to be destroyed, the insurers will only pay out for the cost of rebuilding it.
Having determined what it is that you need from your insurance policy and how much you need to insure your house for, the next stage is to get some quotes. In this Internet age, it’s become extremely easy to get quotes. You can visit the websites of a few insurance providers, or go to a money comparison website. You will be asked to provide some basic details and then will be quoted the cost of the premium payments. Another option is to phone or visit the insurance providers. I’d suggest that you check out at least 6 companies to make sure that you’re getting a competitive deal. (Remember, as well, that you can always change provider subsequently if you find that there are better deals available).
When getting your quote, you may be asked whether you just want buildings insurance or whether you want a combination of buildings and contents insurance. Contents insurance (as the name suggests) covers the contents of your home, whilst the buildings insurance covers the actual property. It’s usually worth getting both, but you will need to decide whether to purchase them together (from a single provider) or whether to purchase them separately.
You will be asked various questions about the property you are seeking to insure and about yourself. It’s important to be truthful in the information that you provide as any inaccuracies may invalidate the policy.
Having obtained your quotes and decided which one is best, you will then be able to complete the setting up of the policy, which usually involves the creation of a direct debit to take funds from your bank account.
Paying for home insurance, and other forms of insurance, is something we are often reluctant to do. I think this is because of the psychological element of not wanting to have to pay for something that we might never need. However, think what the consequences would be should you find yourself needing it but having neglected to take out or maintain a policy. For the peace of mind alone, I would thoroughly recommend all homeowners to make sure that they are adequately insured. I would also stress, again, the importance of reading the small print before buying. The time to read the terms and conditions is before you purchase the policy, not as you sadly survey the remains of your charred house!