Buying a house is a costly and often complex exercise. Add in household insurance to that equation and it all starts to get a bit overwhelming. Fortunately, you have a personal insurance expert on your side! We’ll help you navigate the often-confusing gauntlet of choosing the correct home cover for yourself. Below are a few guidelines to consider before choosing the correct cover.
Insurance companies assess risk in various ways, which is why there are varied costs associated with the same products. You may get a much better premium with Company A than you would with Company B for the exact same product. Assess a number of companies on the same basis of cover. This should give you a fair idea of where you can save. Remember that loyalty can sometimes cost you, so its good to make sure your existing provider is not over charging you. Lastly, price must not be the primary choice for insurance. The balance must be made up somewhere and that could be in the extension of the cover or the rate of claim repudiation (non-payment of claims by insurer).
Choosing the incorrect coverage
This can manifest itself in two forms. Firstly, the replacement cost of your actual home with its market value and secondly, under or over estimating the value of your home contents.
When it comes to insuring a home, the majority of us only look at the cost of replacing the dwelling. This is the value of replacing your entire house, should it be completely destroyed by fire, flood etc. This needs to be calculated as if your house was to be rebuilt from scratch.
The second aspect that needs careful consideration is the value of your home contents. These are the possessions that comprise of all your household belongings and is a very common pitfall when it comes to coverage. Special attention though must be paid to assessing high value household possessions such as art and antiques, these will invariably raise the sum insured. You may also need to specify these to your insurer.
Neglecting to update your policy
Over the course of a policy term, many things can change. You could install a pool or expand your home to accommodate a new master bedroom. No matter what changes occur, do yourself a favor by notifying your broker of these changes.
If you renovate your house and make additions to the existing dwelling, the value of your house will more than likely increase. If you don’t notify your broker of these changes, the chances are you will be underinsured. You might save a little in the short term by not amending your policy but you could lose a substantial amount if you have to claim in the future.
Failing to understand your policy’s exclusions
Most household policies have a number of exclusions; flood damage, earthquakes and ‘acts of god’ are all examples of potential exclusions. Discuss these with your broker and establish exactly what these are.
Establishing the wrong excess
The excess is the amount payable by you, in the event of a claim. In most cases this amount is negotiable, the higher the excess, often the lower the premium and vice versa. It’s important to work out what would be reasonable to pay as an excess in the event of a claim. If you can’t pay your excess, the claim may well not be honored.
Our personal insurance division boasts a number of experts that will help you to choose the correct home insurance for you. Please give us a call or come into the office and we will help you to choose the correct cover for your home.