Home insurance protects your home from any possible damage that could potentially ruin your dream home.
If you are planning to protect your home, you might want to know some basic things about home insurance that could save your money, time and sometimes your house itself. The two basic types of home insurance are building insurance and contents insurance. Some insurance service may also include both. It is suggested to go for the service that covers both the content of the home and home itself. However, if the rate of theft or burglary is very low in your region, you may consider building insurance to protect your building from natural disaster.Content Insurance can be classified into two types by the type of compensation provided by insurance companies. Some companies provide replacement value as the compensation value. Replacement value is the cost required to replace the property. Some other insurance companies provide the current value of the product. Current value of the product is calculated after deducting the past value of the product with deprecation. Obviously, current value of product is much lower than replacement value.
Hence, choose an insurance policy that provides replacement value, even though if its premium is higher than conventional insurance policies.
Spend considerable time in reading your insurance paper, before signing them. Make sure that everything related to insurance is read by you before signing and ensure that the insurance claim process is reasonable and transparent. If you have any doubts regarding home insurance, never hesitate to ask the sales agent.Is your policy inflation proof?
Inflation is one of the cruel economic problems faced by all sector of people. Do a small math to ensure that your premium amount is not ruined by inflation. Hence, choose a policy that claims to provide compensation based on current market value. Remember, construction materials’ cost is increasing rapidly by every year in addition to increasing labour charges. Hence, consider a perfect home insurance policy that offers replacement value.Many people choose a cheap insurance policy and they expect that the policy will save them from all risks. Some cheap insurance policy has lot of traps and hence, be extra careful to get trapped by choosing such policies. You may also consider choosing a specific insurance policy based on the possible risks of your region. For instance, if your home is in the ring of fire area, you may seek earthquake insurance.