How to choose the best home insurance

A home is a safest and most secure place for an individual. It is where people spend time with their families, celebrate festivals, and make memories that last forever. Most of us go for huge home loans to buy our dream home, we spend lakhs on construction and interiors, we fill it with all the necessary and luxurious contents, and we turn it into the most comfortable haven for our families. But we forget to insure the house and its contents with comprehensive home insurance, also called the homeowner insurance. In today’s societies, theft, burglary, fire, earthquake, riots, etc. are the most common causes of damage to the house or its contents. Proper home insurance provides cover to the structure and contents of your house and protects you from the financial burden arising from these situations.

As a result, it is vital that you compare and find the best home insurance plan for your house. Home insurance is of two types –

1. Home Structure Insurance – provides cover against damages to only the structure of the house. Only the home-owners can buy this plan.
2. Home Contents Insurance – protects against damages to all the contents of the house, including appliances, furniture, and jewelry. This cover can be bought by owners as well as tenants.

Home Owners can buy comprehensive insurance with both structure and content insurance. There are many variants to these policies. Following are some tips to follow for buying the best homeowner insurance.

1. Understand Home Insurance– Majority of people don't know a lot about home insurance. It is imperative to read, analyze, and understand what a home insurance policy entails. In-depth knowledge of the insurance and its variants will help you choose the best plan for your home.
2. Understand your requirements – Once you understand what home insurance is, you need to analyze your home insurance requirements. The policy variants and riders should be bought according to your personal needs. For example, if your house is in an earthquake-prone zone, you should ensure that earthquake damages are covered in your insurance. Similarly, if your home is in the terror-prone region, you need to buy a terrorist damage rider.
3. Compare and analyze – In this digital age, you have the ease of comparing different policies and plans from the comfort of your home. Look for reputed insurance companies and tally their products with your requirements. Compare the policies by various providers based on the cover, inclusions, exclusions, add-ons, riders, cost of the premium, etc.
4. Study the insurer – Read and understand the financial capabilities of the insurance company. Check their claim settlement ratio. If any of these is weak, your settlement can be affected in the future. Buy policies only from reputed insurers.
5. Submit a duly filled and signed application form – It is essential to fill your form and answer all the relevant questions correctly. Answering the questions about your house and the value of its contents correctly will ensure that you get an optimum policy that covers your belongings accurately. If any false information is found in the application, it might get rejected.
6. Choose your riders carefully – Riders are the additional cover, over and above the basic insurance that covers specific requirements of the applicant. If the standard policy does not cover the content of the house or any prospective damage, the applicant can buy a rider with the payment of additional premium. For example, “Burglary cover” insures your contents against any burglary that may take place.
7. The correct value of cover – It is imperative that you cover your home and its contents to the exact tune of their value. If you over-insure the house, you will get only the real value as reimbursement as insurance representatives verify the claims before settlement. So, the excess premium paid towards the over-insurance is futile and waste.

If you under-insure the house to save money on the cost of the premium, you will not get reimbursement to the full value of the damage done. As a result, you end up losing more money on the repairs than you saved on the premium.

It is essential that you buy comprehensive homeowner insurance at the time of purchase. Conduct in-depth homework, compare insurers and policies, get correct insurance value, and add the required riders to your plan. This will ensure that you not only make the process easy but also get the right home insurance at affordable rates.