Have you ever wondered about whether you have adequate insurance on your home? Insurance may be a burden, though looking realistically at the events which can happen to affect your lifestyle, it is vital to determine that the level of insurance that you have is adequate. Many home owners are disappointed when trying to claim after an event happens, though a little forethought in advance may save you from not only losing your home, but losing the value of any repayment you get if your home is destroyed.
*Bricks and Mortar. *Outstanding debts. *Extras. *Contents Insurance. *When your home is rented out.
Bricks and mortar.
The bricks and mortar value of your home is usually higher than you think. This is what it would cost to replace your home in the event of any disaster happening. Here, your Policy will tell you what you are insured for and what the normal limits are, but what happens if the value stated by you as being the value of your home changes?
The onus of telling the Insurance company the current value of the home every year of your Policy is upon you. If a claim occurs, and you have under-estimated the value of the bricks and mortar that make up the home, they will not pay you sufficient to replace that home in the event of fire or any of the other perils included. Do get your valuation correct, as it is vital to update this every single year.
Look carefully at your Policy and see if the insurance covers you for temporary accommodation while your home is being rebuilt. Often this is excluded on cheaper insurances, but you will find yourself out of pocket if you do not cover this contingency.
Supposing that you have a loan on the house. There is always an insurance which covers a loan, and here the Insurance company warranty covers the cost of your debt. They are not interested in the reinstatement of your home. All that concerns them is that they get their money back. In this case, the Insurance company states the value of what the Policy covers, and this runs in line with your outstanding debt. Read the policy carefully and understand that the value insured must be in line with what you borrowed, as this is all that the Insurance company are concerned about in this instance, and this will not include rebuilding of your home.
With the Insurances for the contents of your home, shop around. It is vital that you do, and also look into those policies which will pay you “New for old”, or replacement value of your belongings, rather than just the current value of old items. This means that if your television is destroyed, you can buy one on today’s market which is equivalent to the one you lost, which may indeed cost more than the original TV did.
Contents Insurance is extremely important, and you should never under-estimate the amount of possessions you have. Make lists of all items, as if lost in a fire, this may amount to more than you think. Do a spot check from room to room, and be sure that you are adequately covered, rather than giving them a low value thinking that your premiums will be lower. It is not worth the risk. Find out also what cover your contents insurance gives you for items which you carry with you, or in your car. Many companies offer this as an extra.
When your home is rented out.
Often people rent out their homes thinking that the obligation for Insurance falls on the tenants. Be careful. This is not always the case, and whatever insurance arrangements are to be made must be written into the rental agreement. It is wisest to go through this with a lawyer when drawing up papers, since you may be held liable for the damage to your home, even though you do not live there.
There are agreements which define the owner as being responsible for the house insurance, and the tenant being responsible for their own contents insurance. Be sure that your tenant knows the situation and is adequately insured.
We all hate these extra expenses. We all complain about having to pay Insurance, though that one day you decide not to pay your premiums, or take up cheaper insurance, economizing on telling your insurer the true rebuilding cost of your home, or the value of your possessions could just be that day you lose everything. It’s not worth it. In an event such as this, knowing you have adequate insurance gives you peace of mind, and can secure your future.