Home Insurance 195 views
Home insurance policy is a good financial tool to secure your home from natural calamities and disasters. When you apply for a home loan there are many banks and financial firms, which ask you to buy a home loan. Some ask you to get your home insured from them only and some gives you freedom to buy it from your own. In both the situations, you should keep few things in mind before buying a home insurance policy.
- Why you need home insurance: First, find out why you need home insurance? Do you want to insure your home along with your personal belongings? Second, do you want to add your furniture and persons also in your home loan? This is really necessary to find out your needs of home insurance. You want to insure the building only or you want to add other interior and exterior as well. So, buy a home loan based on your needs.
- Decide your coverage: The better your coverage of your home insurance policy, the higher will be your recovery when you will claim insurance in case of any disaster. Always, try to buy a policy that will offer you similar price benefits of your property or at least for the amount of your home loan.
- Find about deductions on loan: Deductible is the amount, which you are going to pay from your pocket and you will get it deducted when you will apply for a claim. Know about that amount and choose a policy accordingly. You should be always comfortable in paying the premiums of your home loan and accepting the deductible amount.
- Replacement cost or actual cost: When you buy a home insurance policy the insurer ask you to choose from replacement cost or actual cost. Replacement cost include the replacement/repair of all insured items without any deductions. But, actual cost means that you will get a depreciated amount of your items to replace/repair them. Generally, you should buy a policy that will fetch you at least 80% of amount even after depreciating the value of all items.
- Compare before you buy: Before buying the policy, you should always compare the price and premium you are going to pay for the policy. Compare the premium and refunds of you policy with other products in the market. Make your decision on the calculations and higher returns on your investments.
- Negotiate with your agent: When you buy a policy just ensure that you negotiate well with policy agent or representative of the insurance company. You should always ask for better deal and higher returns on your policy. You should also ask for more benefits as well as lower premium if possible.
- Read the policy carefully: It is always printed on every policy or financial product you buy that read the documents carefully. It is very important that you read all the documents carefully before signing it. You can ask for a dummy policy to read the document before making the final buying decision.
- Check your home insurance needs on yearly basis: This is important that you discuss your home insurance requirements with your insurer every year. If you have added a new room, or renovated your home, changed some interior or extended your home, ask your insurance company to provide you the updated value of your property in context to the changed done. Even ask for the new premium amount if there are any changes in it.