Home buying is an important event in one’s life. It is also a big investment to strengthen the financial position. Generally, a developed property comes with a limited warranty of 5 years restricting to structural and interior aspects. However, it doesn’t include home insurance.
We do a lot of research in buying home appliances and electronic gadgets like mobiles, laptops, stereo systems, etc. We check the warranty and after-sales service. Home buying is one of the most expensive purchases in your life. Hence, home insurance is an essential aspect. It gives you protection from damage to the property and your other important belongings. Home insurance will give you the much-required peace of mind. Let us check out more about home insurance, its categories, and benefits.
It is the coverage provided to you for home protection incurring a small payment called an insurance premium. This protection cover protects your home against damages caused by accidents, vandalism, earthquakes, fire, theft, etc.
Insurance companies will provide you with the most suitable insurance policy as per your needs from a wide range of policies.
Only the home buyer is eligible for this insurance and not someone having a home on rent. The structural damages of the property are covered. You can also include the home extensions or additional owned space such as garages, outhouses, sheds, etc.
This policy will cover your personal belongings and assets like jewelry, furniture, electronics, etc. In this case, even a tenant can buy this insurance.
The insurance premium is a nominal payment done to the insurance company which covers a large amount of loss caused by an unprecedented event.
Even the best of the best policies has certain constraints. Some events or aspects are excluded from the coverage. This differs from company to company. Below are some events or aspects listed:
1. If your home is unoccupied
2. Destruction at will
3. Wear and tear of the property.
4. Minor internal damages or damages by insects.
5. Act of terrorism
6. Civil war or military attack
Home insurance covers the following aspects:
Property insurance covers the damages from natural calamities like earthquakes, cyclones, floods, and fire due to lightning. It also covers the man-made damages incurred through vandalism, fire, theft, etc. Compensation is provided in both cases.
When your home is in a damaged state and in the repair process then your expense of renting a home will be compensated.
If you cause someone accidental damage at your home then the liability is covered by your home insurance.
In addition to the protection of the home structure, it covers the loss of assets like electronic gadgets, jewelry, furniture, and other valuables.
When you call for the home insurance claim and the terms and conditions of the policy are fulfilled, you are compensated for the damage incurred based on the valuation. Nonetheless, it depends on the type of valuation you choose at the time of buying the policy. Types of valuation as mentioned below:
Ensuring your home at indemnity value, the sum as well the total premium paid can be claimed post deduction of depreciation value since the purchase of the property.
Home insurance is not mandatory when it comes to a mortgage loan. However, some banks or lenders do insist on having the property insured. Besides, it is always better to have your home insured not just limited to the insurance benefits but an advantage while opting for a mortgage loan. Last but not least, buying a home insurance policy gives you security and complete protection from unpleasant and unprecedented damaging events and helps you to restore your peace of mind.