Major Things To Know Before You Buy A Home Insurance
Home is one of the biggest investments of our lifetime and hence we cannot take any risk with it. Therefore, it is very important that we have some good home insurance to protect our home in any type of situation. But before you go to buy any home insurance, it is essential that you understand some basic things like how much insurance is needed or what things have to be covered under the policy, etc.
Here we have discussed certain basic things that you need to keep in mind when you are planning to buy home insurance. Have a look at them below:
Three Main Types Of Home Insurance
There are three types of insurance covered under the home insurance policy namely comprehensive policy, basic insurance, and broad policy. Under the comprehensive policy, all risks related to possessions and your home is covered. Anything that is not covered will be mentioned specifically in the policy.
Next one is the basic insurance also known as named perils insurance. In this, only those risks are covered which are specifically mentioned in the policy. Insurance can include for example damage from fire, theft, etc. for this, you need to discuss with the insurance company on what things you want to get added or not.
Third and the last type is broad policy. Home insurance is a combination of both the above-discussed policies. It means that by default you will get comprehensive coverage for your home and along with that a basic coverage on certain specific contents of the home. You can get better information about these insurance types with General Insurance.
There is a fourth kind of coverage as well which is known as a no-frills policy. This is only for certain buildings which do not follow the standards of the insurer due to some reasons like structure issue etc.
Insurance For An Item Can Be Done On Actual Cost Or Cash Value
If any item is insured for the cash value, you will get the cost according to the current market value of the item. Unlike this, if insured with actual cost, no matter what the value of the item is today, you will get the same amount for which you bought the item. A crucial factor to consider when it comes to home and auto insurance.
For example, you bought the refrigerator for $1000, but after 3 years maybe your device gets depreciated or outdated and its worth becomes $500. So if you had insured the refrigerator for cash value, you would get only $500, but with actual cost, you will get $1000. FTO gets the item insured for actual cost; you need to pay more money which is obvious.
Extra Insurance Needs To Be Done For Valuable Items
The home insurance policies are mostly covering the maximum value contents of your home. But in case you have exceptionally valuable items in your homes like jewelry, or some expensive electronic gadgets then added coverage has to be bought to insure these items. You can talk to your agent for better understanding about the added coverage for your possessions.
Third Party Liability Is Covered In The Home Insurance Policy
In case you are held responsible legally for injuring someone, the third party liability will save you from taking the financial responsibility that you might have to pay.
It is very important that you take proper advice from the agent to get the best policy for your home that protects you in case of any mishaps.