Tips for choosing the right home insurance policy

Buying a house will often be one of the biggest investments that anyone will make in their lifetime. It is therefore recommended that anyone who wants to protect this major investment should ensure that they have a good home insurance policy in place to cater for such calamities as theft, fire, floods and so on. However, given the fact that there are many options available of home insurance policies with different coverage options, premiums, and available additions, it becomes quite challenging to choose the right one.

How to choose the best home insurance policy?

With options and sometimes lack of knowledge, it is difficult to choose a good home insurance policy which gives adequate financial pretention and also complete peace of mind. This guide helps you in selecting the right home insurance policy that will properly cover your home and items without overpaying premium.

1. Analyse your needs:
   
   The first thing that is necessary to choose the best home insurance policy is to decide what you really want to insure. Create a list of all the aspects you would like to be covered; it may be the exterior structure of the building or interior, such as furniture or electrical appliances. 
   
   Other factors include increased limits and other endorsements, such as jewellery or valuable items. This should assist you in identifying the kind of policy and the right coverage amount for your circumstances. 
   
   Only those who stay in areas vulnerable to flooding or earthquakes would be in need of these natural disaster covers if these are optional in the policy.

2. Compare quotes:

With a general idea of the covers you are interested in, it is now time to look for various plan options. Here, one can compare many of the features and premiums of the insurance plans.  You will have to enter some basic details of the property. You need to choose the plan option which best suits your needs.

Key covers to consider while choosing the right home insurance plan:

While analysing home insurance plans, look for the ones providing adequate financial protection for the following key covers:

1. Building cover: This entails any structural issues like walls, roofs etc. that are as a result of man made or natural incidents. Many providers provide this cover on reinstatement basis paying for costs of rebuilding the house without a reduction for wear and tear.

2. Contents cover: Provides coverages for any home contents, such as furniture and electrical appliances, that may be lost or damaged by a fire, storm, or theft, among others. Most policies entitle coverage of contents up to a sum insured equivalent to 20 per cent.

3. Alternative accommodation: It covers payments for temporary residence if your house becomes uninhabitable after an insured occurrence.  

4. Loss of rent: If you have rented out your premises and an insured event occurs that renders the property uninhabitable, then this section of the policy will cover loss of rent. 

Assess the add-ons for the right home insurance coverage:

After assessing the core covers offered by the plans on your shortlist, consider other benefits that the insurer may offer. Extensions are offered to increase the limits of certain items or an occurrence. 

Here are some useful home insurance add-ons to consider:

1. Personal belongings cover: 
   Specialises in assuring valuable items such as jewellery, watches, furs, etc. 
2. Appliance cover: 
   It focuses on electrical/mechanical failure of home appliances and other technological gadgets due to faults in their technology.
    
3. Man-Made Hazards: 
   Riots and terrorism for instance are human influenced calamities and their outcomes are as devastating as a natural calamity. This ensures to minimise the effects of the burden, amongst other things, when the worst happens. 

Depending on your specific requirements, you have the option of choosing any of the add-on covers to your base policy to make it more comprehensive. Well, they do add extra costs to the product, so it will be wise to evaluate whether the added value is worth the money.

Evaluate exclusions

Every home insurance plan comes with general exclusions like:

• War, nuclear damage, and radiation are all related concepts that are vital to be understood and analysed.
• Vandalism, arson and any other act of destruction of property by the policyholder

Assess premiums

The most important factor is the amount that a buyer is willing to pay for the home insurance. Obviously you desire sufficient protection with price being a very important factor as well. This may help to look at your eligibility for availing any kind of special offers from the insurers.

How do you select the best property insurance?

One should select a home insurance policy that provides coverage for the probabilities of natural calamities prevailing in your region. If you are from an earthquake zone, ensure that the earthquake is specifically included since it could be an optional extra in some policies.

Choosing a property insurance lies in the selection of an appropriate plan based on the potential exposures in a particular region. Be cautious and read the specific situations when the home insurance policy can be applied before purchasing it.

Conclusion

It is a wise effort to put your earned home in the hands of insurance to protect the future of your family members. Although there are so many property insurance out there, comparing your needs and checking through the various coverages help you identify the right custom fit policy. Always focus on basic structural and content covers along with valuables. Also, to make it effective, it must be easy for the insurer to offer claim assistance services besides facilitating the renewal of policies on time. These are the home insurance buying tips, and it is worth investing in a home plan with better coverage for the precious home for the year to come.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same.