How to Choose the Best Home Insurance Policy?
Buying a home is undoubtedly one of the most valuable investments that anyone can achieve in their lifetime. Therefore, protecting your home with the right home insurance plan is an ideal choice.
When it comes to choosing the best home insurance policy, you must ensure that the policy covers your home and shields it from disaster or damage due to natural calamities or man-made causes, such as fire, theft and floods. However, as house insurance policies have many options available, like different coverage options, premiums and available add-ons, it becomes a daunting task to choose the best one.
So, this blog explores some of the top tips that will help you choose the best home insurance policy. But, before diving into this, let’s understand ‘what is home insurance?’ and why it is important.
What is Home Insurance?
Home insurance is a type of property insurance plan that helps you protect your home during unexpected events, like natural calamities or man-made threats. The policy generally provides coverage for the structure of the home, its belongings inside and against different kinds of damage or loss, such as fire, theft and natural disasters.
Why is Home Insurance Important?
Your house is certainly the most valuable asset for you. And, any disaster or damage caused due to floods, earthquakes and other natural or man-made calamities can affect the entire structure of your house, making it totally unsuitable to live in. This is where a house insurance policy becomes essential that protects you and your house from such unexpected situations.
Here is a list of the top reasons why home insurance is important:
- Protection against liabilities
- Coverage against natural or man-made calamities
- Coverage of temporary living costs
- Coverage for the loss or damage of valuable personal belongings kept inside the insured home
- Helps get a house loan from banks
Top 10 Tips for Choosing the Right Home Insurance Policy
Now, let’s explore the top 10 tips that will help you select the right home insurance policy as per your requirements.
1. Understand the Insurance
In order to select the right policy, you must understand the insurance policy and know its coverage. Only then, will you be able to measure your needs and obtain better terms.
2. Evaluate Your Requirements
If you are planning to buy home insurance, then you must know your requirements. You can either consult with an agent at one or more insurance companies or research online to understand the coverage you will need.
3. Compare the Different Policies
After having a complete understanding of your requirements, look for reputable insurance providers that provide the best coverage. Then, make a list of all the policies that suit your requirements, and compare the policies based on coverage, deductibles, exclusions, limitations, price and premium.
4. Research the Insurer
Before choosing an insurance provider, do complete research on the insurer. If your insurer takes a big financial hit due to many conditions, then your claims will suffer. Hence, it is advised to do thorough research on the financial background of your insurance provider before applying for home insurance.
5. Check the Claim Settlement Ratio of the Insurer
Another important factor to consider is to check the claim settlement ratio of the insurer. It is recommended to check the claim settlement ratio of the insurer for a clear idea of the number of claims settled and received in a year.
6. Improve Your Credit Score
In order to get a better premium, it is important to enhance your credit score. If you have a low credit score, then you will need to pay more for your home insurance.
Well, there are several ways to improve your insurance amount.
First, make sure you clear all your financial dues, like personal loans, automobile loans or credit card EMIs. Make all your bill payments on time and don’t apply for any loans until you get your home insurance.
7. Decide What Coverage You are Looking for
It is essential to decide what you want to cover. Generally, standard home insurance may not be enough to provide complete coverage for your house. Hence, find the right policy that works for your living and home possession situation.
For instance, if you are a homeowner, then you must look for what coverage you want, like only the structure or the insides of your home. Or, if you are a landlord, then discover if your policy covers damages due to tenant negligence.
8. Answer the Questions Correctly
Providing answers with accurate information is also considered an important tip. Your insurer can ask questions about the different features of your home. Keep in mind that answering all the questions correctly will help you get the right policy as per your requirements.
9. Choose the Right Add-ons
Choosing the right add-ons is essential, ensuring you get the best protection. If you find that the coverage isn’t sufficient for you, then you can choose add-ons that help enhance the coverage at an additional rate. For example, in order to cover the precious jewellery at home, you can choose the jewellery items add-on.
10. Evaluate Premiums
Home insurance premium amount is also considered the most essential factor. Evaluating your premiums for home insurance is an ideal way to avail special offers and benefits that insurers provide.
For the premium, factors that you need to consider include a type of ownership (owned or rented), the cost of the building, the price of contents and jewellery and add-ons chosen.
It is a wise decision to secure your house with the right home insurance plan. Although there are many house insurance policies available, assessing your requirements and coverages helps you get the right policy.
Hence, when you buy home insurance online or offline, it is essential to understand how it works and what coverage it provides. This will not only help you choose the right plan but will also aid you in getting it at an affordable home insurance premium.
