5 Tips for Choosing a Home Insurance Policy
February 16th, 2015
Insurance is essential; it protects your home from unforeseen disasters, and it’s a gamble to go without it when you may end up regretting that fact in the future. The process of finding a good insurance policy can unfortunately be a daunting process. There are countless insurance companies out there, and knowing which is the best policy for you can be extremely difficult. This article will give you some helpful tips to guide you towards finding the best insurance policy for you.
Shop around
A positive outcome of having such a big market of insurance companies is that prices will be competitive. You may be offered a type of insurance with your mortgage or loan, but don’t immediately accept it out of convenience as you’re likely to find a better deal elsewhere. Some companies may be able to offer you a particular cover that’s suitable for you while others may not. The price of premiums and limits of monetary value used to replace items will vary with each company. It really does pay to get multiple quotes on your house and contents to find the right policy for yourself and your family.
Think about what you want covered
You may have very specific items you want covered. For example, if you have a unique vinyl collection, it’s worth discussing with the company the potential of getting this covered. Other important items such as jewellery or laptops need to be stated individually if their value is over a specified amount. While you’re deciding what to state, it may be worth getting some valuations to give your insurance company, as your valuation may be lower than the cost to replace an item, and this may be a problem if you make a claim.
A good tip is to walk through the house and write a list of everything in it with a rough value beside the item, then check it with the valuation.
A lot of the items in the contents insurance will have a general upper limit, for example $500 for linen, so beware of this when you are looking through your options.
What type of premiums can you afford?
You need to be up to date with your premiums, so although paying for the most advanced policy bundle may suit you, paying for it monthly could be a problem. If you do miss one of these payments, the insurance policy could be made void just when you need it. However, the opposite is true as well. Don’t go for the cheapest, bare minimum policy when you can afford to pay a little more each month. This could be a better investment for you in the long term.
A good middle ground to save money but still get cover is to have a higher excess. This means that you receive the insurance money, less the excess you’ve chosen. For example, a claim for a $4,000 stolen laptop means you pay $1,000 excess and the insurance company pays you $3,000. $3,000 is still a good amount of insurance, but allows you to pay part of the claim and lower premiums.
Look at the extras
There are extra insurances that you should be careful not to automatically get, for example pet, dental, or health insurance. These will add a significant amount to your premium and you may have no need for them.
Read the contract
The final insurance contract will be lengthy and detailed, but don’t dismiss it and just trust the insurance company. There could be clauses in the contract that you’re unhappy with, or a particular excess or valuation is incorrect. One thing to be sure to look at is the annual premium increases, make sure they are what you agreed on and in line with the industry.
If you’re uncomfortable with these types of documents, then it may be best to give them to someone who is familiar and can read through them with you and clear up what you are and aren’t covered for.
Getting the right insurance policy for your home and contents is something you need to get right. One of the key hints is communication with the insurance policy – don’t be afraid to ask them if you are unsure about something.