Bricks and mortar build a house. Hopes, emotions, love and memories build a home. Home indeed is a place where the heart is and so a lot of effort goes in into building the perfect home. From planning the robust exteriors to designing the delicate interiors, you invest a lot of time, effort and of course money to get the perfect home.
However, sad as it may sound, at times the dream house comes under the threat of being destroyed. A fire can easily wipe out a large portion of the house, or a flood can wash away all your valuables. Even worse, a theft can occur and you can stand to lose all the things that you used to put your dream home together.
As a result, you must be careful and have your home covered against all the unwarranted situations that can arise, so that in case of a disaster you will have the resources to build the dream house back again. So go ahead and get yourself a home insurance policy, but before you do so, keep the following points in mind.
1. What it largely covers: Home insurance policies usually provide cover for the structure of the building, the house owner's belongings (damages may be due to fire, theft, etc), liability to a third party (due to loans, etc) and the cost of living if the house owner is forced to live elsewhere due to damage to the house (until the house is rebuilt or repaired).
2. What it usually doesn't cover: Home insurance policies do not cover damages caused by natural calamities like flood or earthquake. However, almost all policies have provisions for riders, with the help of which you can get additional coverage for these disasters. The policies do not cover voluntary destruction of belongings or the structure of the house. For example, if you willfully break a wall inside the house to accommodate furniture, the insurance policy won't pay for the damages.
3. Replacement value coverage: Replacement value coverage ensures that you get the exact value of your house or belongings at the time of your claim. A home insurance is not like a garage sale - you cannot expect to get less money for your valuables when you need to replace them. You should have enough coverage to get the exact same new things that you had before the theft/fire. While going for a home replacement policy, see if you can opt for an extended or guaranteed replacement value cover. A guaranteed replacement value covers the costs of a new house, irrespective of the amount. This kind of a policy is however difficult to find nowadays as most companies have discontinued it. So try to get an extended replacement value policy which would cover the entire value of the house and additionally would also cover some extra costs incurred while rebuilding at the current market rate.
Prevention, they say, is better than cure. So make sure you have a home insurance policy well before a disaster strikes. Keep the above mentioned points in mind and opt for a policy that would cover the maximum areas for you. Also remember to keep the documents in place for often home insurance documents kept at home are damaged when the house is damaged. So make sure you file the documents and keep them at different places for future references. A home is built with many dreams and the simple procedure of getting a home insurance policy can protect those dreams very efficiently.
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal
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You may write to the author at Deepak@myinsuranceclub.com