September 15, 2023

Importance of insurance while buying a new home

Buying a home is your life’s biggest investment and you would obviously like to keep it safe with the cover of insurance. A home insurance policy offers you financial security on your residential apartment or house and can also cover you against natural or manmade disasters, burglary or other losses including jewellery, appliances, etc precipitated by damage to your property.

When you are buying your first home, it might feel like an added burden, but home insurance is absolutely essential to safeguard your home and valuables, and in the process, insulate your financial stability against any unforeseen catastrophe. It is peace of mind.

While the need for home insurance is a no-brainer, the home-buyer has to figure out whether to go for a structure or contents insurance policy. A structure insurance covers you against losses incurred in natural disasters resulting in structural damage to the house, while a content insurance safeguards against losses or damage to household items including fixtures and furniture, jewellery and electronic appliances.

Points to ponder for a first-time home-buyer:

# Figure out the ambit of coverage: It is absolutely imperative to comprehend the extent of the home insurance cover before you opt for one. You will always find a policy tailored to your needs. Usually, a home insurance should offer you coverage for the home structure, personal belongings, liability, etc, besides providing you with additional expenses to get by if your home is rendered unliveable due to any covered event.

# Fix a price to your home: You must find out the real value of your house keeping in mind factors like built area, age of the property, materials used in construction and of course, location, among others. This would help you fix a price in case you have to rebuild your house following a total loss due to any event covered by your home insurance.

# Compare before you buy: Before settling for a particular home insurance package, you should compare a number of policies from various providers so that you can look at the rates vis-à-vis coverage. This should enable you to land the best coverage at the most competitive price point.

# Bundling is a good option: It could be a profitable exercise to combine or bundle your home insurance with other existing insurance policies like car insurance, etc. You could end up saving a tidy sum.

# Be comfortable with your deductible: The out-of-pocket expenditure that you incur before the insurance policy kicks in, is your deductible amount. You must be comfortable with this quantum, since it will affect your premium payout. So, choose the right deductible after dialogue with your provider.

# Review policy at regular intervals: Your home insurance policy should be flexible to address your evolving needs. For instance, you might choose to carry out major upgrades or changes or renovation work that would necessitate updating your policy accordingly. Hence, you must review your policy details periodically, so that you are on your toes.

# Seek discounts: Remember, it is a highly competitive market and insurance providers are falling over one another to expand their footprint. So, they are usually open to cutting a little slack in terms of discounts. Don’t hesitate to ask for discounts on certain points.

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