There’s a certain corner of the brain that is designed to shut off once humans see a long list of seemingly unconnected pointers that are titled ‘End User Agreement’ or ‘Terms and Conditions.’ When was the last time you sat through one of those lists and read it until the end, understood what you getting into, and then put in your signature or gave your approval? While installing software or signing up for a social network, the implications of not reading the terms are not generally too severe. What about the more important things in life like your home insurance? Insurance agreements have a lot of terms and conditions attached to them, some of them go to a few pages, and all of them are very important.
Why is insurance important?
To answer this question in the simplest way possible, insurance is important because the home you live in is valuable and not impervious to damage. To restore, replace, or at rare times, rebuild your home is normally very expensive and if you are not insured, it can blow craters in your savings. This is the primary and most important reason why you should have some form of insurance for your home.
The fine print
Now that the importance of having a home insurance is obvious, it comes down to getting the right kind of insurance. How you choose your cover is entirely up to you. Keep the following points in mind before you sign the dotted line.
Do not assume
Depending on where you stay, your house may be vulnerable to certain damages, and this is another area where you have got to be shrewd. Do not assume anything when it comes to insurance. A standard policy will cover most damages, but the will normally exclude the damage that you are most likely to face. If, for example, you live in an area that is prone to earthquakes, your standard cover will exclude it. So make sure you know what is and included in your insurance. This is only the beginning; there are a host of other things hidden in plain sight. They are coded in legal language, so common folk will need expert guidance to get through them. Some of the most common assumptions when it comes to home insurance are:
- Mold and sewerage damage
- Flood and related water damage
- ‘Acts of God’
- Fire, both accidental and negligent
- Theft and vandalism
- Hail and snow damage
- Subsidence and other ‘movement of the earth’ damages
- Animal attack or infestation
These are only a few of the long list of things that you should never assume you have. A standard insurance will, in most cases, cover a good number of these damages, but it is rare for one policy to have them all.
Do not under-insure
The main reason for you getting an insurance is that it will help you tide over tough times. So it naturally makes it null when you do not have enough coverage. Most people, however, under-insure on purpose and they do it because they are either not aware of the full value of the home or they underestimate the amount of damage they expect to face. The rule of thumb is to either go for a full 100% coverage or a minimum of 80% of the total value of the built up house, the things inside, and even the landscaping that you may have done. If you are not sure of how much all that is coming up to, it would do you good to have a professional appraiser do the calculations.