Five things to note while buying home insurance

Adhil ShettyBankbazaar.com

Buying your own house or building it from scratch is almost always a very emotional affair, and usually has your dreams and memories attached to it. However, a fire breaking out in the house or vandalism can not only devastate your dreams but also drain your wallet completely. It is always better to secure your property with adequate property insurance, so that it can act as a shield during the crises situations.

Before you choose an insurance policy, you must consider whether these can actually help you secure the property, otherwise you might be at a loss when an unanticipated crisis situation pops up. Here are some simple tips and tricks to get you started:

Choose the right plan

Property insurance is not just to compensate you for the money lost in case of an accident or untoward event. One can also claim under the policy as soon as they need to repair, remodel or renovate the residence after the accident. In other words, post-accident recoveries can also be included in the policy. This would be applicable in cases where recovering from the accident would cost you more than the actual loss. For example, let us say the valuables in your house have been lost in a fire accident. You can claim the loss incurred as per the coverage you have taken, and some additional money for expenses met for clearing the debris and repair. Choosing the right plan after assessing all possible scenarios or going for specialized packages is a big ‘do’ while taking property insurance.

Related stories

Adhil Shetty

CEO|BankBazaar.com

• 
  Avoid rookie mistakes: Top 5 factors to consider before taking a loan against property
• 
  Understand these 5 terms and conditions before buying health insurance
• 
  A six-point guide for car purchase this festive season

Opting For Adequate Coverage

Even today, many people are prone to financial disaster due to lack of farsightedness. Choosing a sum assured based on an assessment of the value of your belongings and the property itself is very important. You may save a bit on premium if the coverage is low. But this may cost you a large sum later if your property and belongings are under-covered and your property is damaged in an untoward event. Understanding the elements covered by the insurance plan is crucial, before you opt for a specific coverage. For example, before buying a property insurance policy, you must check for the common problems in the area where your property is located. If the property is located in a flood-prone area for instance, flood insurance becomes mandatory.

Considering the Claim Settlement Ratio of the Company

Don’t just go for an insurer who offered you a competitive rate as compared to the other players in the market. Since property insurance involves a huge amount of money, you must be extra careful while selecting the insurance company. One of the easiest and most effective methods is to browse through the online discussion forums or feedback sections, and look for their service, policy selection, quotes as well as availability. Hunting for the insurer that allows premium discount rates is important. With numerous organizations introducing innovative policies these days, it is not very difficult to select the right one to comply with your needs.

Read the fine print well

Never ignore the policy document thinking that it contains all those inclusions and exclusions that the agent explained to you. Read the fine print well and cross check if all the terms and policies are as agreed. If there are any errors in the policy document, even if it is a spelling error in the address, bring it to the notice of the insurance company and get an endorsement without delaying.

Whenever you opt for an insurance policy, always ensure:

• You must be sure of the property papers, in order to claim an insurance.• Ensure that a candid description of the address or location of the property, and the areas to be covered is mentioned in the policy.• Keep the bills of the valuable electronic gadgets / appliances covered. This might be required at the time of claiming under the insurance policy.Now, that you know the crucial factors governing your policy, here are some things you must avoid while purchasing your insurance policy in order to avoid complications in the near future.

Some don’ts while purchasing property insurance:

• Never request anyone (except your family members) to fill up your property insurance proposal form.• Never hide any facts pertaining to your property, be it past accidents, renovations or fixtures in your house.• Avoid overstating or declaring wrong notional value about the property; this will inevitably invite disputes while claiming your insurance policy in the future.

It is an undeniable fact that property insurance does not actually protect your property from the elements or wear-and-tear due to age of the building. But it is a formidable shield against contingencies and unforeseeable calamity, and once you take some basic precautions, taking care of your property is less stressful and more convenient!