Homeowner Policies

Insurance has been a product that has with stood time, from 1863 when in a little coffee shop, Lloyds started using the coffee shop as a market for insurance to today; insurance remains a corner stone for many industries.

The primary reason for insurance has always been to pool resources together to enable the losses of a few to be paid for & shared amongst many therefore reducing the burden on individuals. Insurance provides security, peace of mind Credit provides employment & the insurance industry is the largest industry that finances a country.

Should everyone have insurance, well that is a no brainer, even in the most difficult of economies; insurance is vital.

As consumers, be aware that firstly an insurance policy is not a maintenance policy therefore it will never cover for broke pipes, clearing drains and unplugging sinks. As a homeowner one has to maintain the house in a good state to enable insurance to provide the cover that it is designed for. As one takes their car for service, one should also make sure that the house is maintained regularly, make moisture tests, check for mold and any water stains round the house because an insurance policy covers for sudden and accidental damage, nothing that is ongoing.

Homeowners’ insurance is one of the simplest insurance policies that anyone can buy, although many people do not care to read the policies, they are a few things to look out for in a homeowners policy that are essential. They are many different types of policies that one can take and many people try to get the cheapest. The cheapest policy is not always the best policy, the price reflects its worth it is better to pay for the best product and be covered that pay for the cheapest & get to lose everything when it come to making a claim.

The first thing to look for in a homeowners policy should be that the policy is “all risk”. A policy that is all risk covers almost everything with a few exceptions that are not considered to be insurance issues. When one takes out an all risk policy, 90% of what would happen in the home has already been included in the policy. You would have to be the most unlucky person in the world to have a claim that is not covered under an all risk policy.

The most important thing in insurance is the subject matter, what do you want to insure? A homeowner policy has to cover for what you own; you cannot insure what you do not own. When that has been established next place values on the policies that you want to be covered for. When the insurance broker advises the values it will always be wise to pay more to increase the values of cover, this eliminates any under insurance, look at the housing market, when prices go up, the value of houses go up & when your house is a total loss, if what you bought it for is less than the value at the time of loss you lose.

It is very important that you always allow for margins of error, a typical insurance policy will have a minimum sum insured, go through you items & make sure they are within that sum insured. Look for a policy that covers contents while away from home, that will cover personal possessions anywhere in the world that will also cover for your children’s contents while they are at school or college away from home.

When you increase the sums covered, you increase your potential for having no issues when you claim, you beat inflation and will never be under insured. Another important thing to look out for on a homeowner policy is if it offers GRC or Replacement cost on contents.

GRC (Guaranteed replacement cost) will make sure that should your house burn down, the policy will cover the full value of replacing a new house no questions. Without GRC, if you insure for $250,000 and the cost of replacing becomes $400,000, after the insurer get to $250,000 that is all they are entitled to replace. The most important aspect of a homeowner’s insurance policy is that you do not compromise with cover, never go for the cheapest because life is unpredictable and it might be your house that is robbed or that burns to the ground.

The last most vital important aspect of a homeowner’s policy is liability cover; make sure that the sums insured for your liability are adequate.

In conclusion, a homeowners policy I would term to be the best is one that is an all risk policy with earthquake cover, sewer back up (flood in other flood prawn areas), glass cover and it should also have replacement cost and guaranteed replacement cost. The policy should also have a low deductible and a substantial cover for liability at least three million dollars worth of coverage