Things to check when taking out a home insurance policy

A home often is the most valuable investment individuals make in their lives. Keeping it properly insured is important, as a poorly managed home insurance policy can be an expensive piece of paper that will not provide the coverage expected in your time of need. It is your responsibility to buy the right coverage in case of a loss. There are a number of things to watch out for when taking out a policy.



Firstly, it’s important to compare insurance companies. Always shop around for the right level of cover at the best price. It is often as simple as phoning three insurance companies or visiting three websites. When you visit insurance companies' websites, use their calculators to see how much cover you need, but be careful as these online calculators can vary from company to company, so try at least three before making a decision.



Remember that it is important to be honest with your insurer. Many people are tempted to add fictitious items to their list of lost or damaged goods. If you get caught, there could be serious legal implications.

Home insurance policies typically provide 40 to 80 percent of the value of the house for coverage of its contents. A personal property inventory can help when working out the value of personal property and can be given to a claims adjuster if necessary. Some items have limits or exclusions in home insurance policies. Jewellery, fine arts and collectibles typically have low limits and should be covered by an additional endorsement. Reviewing your policy and speaking with an agent can help you pinpoint such areas and protect yourself.



Remember that the insurance value of a property is not the same as its market value. Market value is what you can sell the house for today. Insurance value is how much replacing the house from the ground up will cost. The insurance value is typically higher because it includes the costs of tear down, debris removal and foundation inspection.



Actual cash value covers your house and contents for the value minus the depreciation, but the replacement cost does not subtract depreciation. Agents can use actual cash value to reduce the cost of the policy, though the policy may fall short of what the owner needs if a major claim is made. Check your policy to see how it treats the contents, building and roof.



The higher the deductible of your insurance policy, the lower the cost of the home insurance (though the differential gets smaller as the deductible increases). Ask your insurance company to provide several quotes with different deductibles and pick the option that fits best. Keep enough in savings to cover the deductible in case of a claim.



Home insurance can be complicated and may contain additional endorsements and exclusions. Some policies exclude floods and earthquakes. Review your policy and check about potential coverage gaps.
Last but not least, frosted film, whilst not being an advantage from a home insurance perspective, can prevent a claim for theft, as a thief cannot see what is inside your home, and thieves usually prefer to break into a house knowing what they can steal.



The author of this article is a part of a digital blogging team who work with brands like Belron. The content contained in this article is for information purposes only and should not be used to make any financial decisions.