We often keep the things we cherish at home. It serves as our sanctuary, a place of rest and respite after a hard day’s work. More than just a setting for domestic activities, a home represents everything that is valuable and personal. One way to protect your home from the elements and unexpected events is through home insurance. Not only is it a requirement for mortgage application, but home insurance also helps in minimising the risks, providing coverage for damages your property might incur.
How important is home insurance? Do you need to get one for your residence? Below we list down its advantages:
1. Safeguarding your financial assets
If a natural disaster or accident does not damage your home, stealing valuables is a common occurrence. Unless you have a dedicated emergency fund, it will be difficult to shoulder repair and replacement costs. Buying home insurance relieves you of such worries. The policy will protect your property and possessions by covering all the damages and losses you incur. Take note that the amount covered would depend on your chosen insurance plan, so choose wisely.
2. Applying for mortgage
Homebuyers planning to succeed during the mortgage pre-approval stage may need to purchase buildings insurance. Since the mortgage firm will use your property as loan security, the best way to protect their financial interest is to insure the property against fire, storms, earthquakes, sinking grounds and other natural calamities. You have the option to buy buildings insurance from the same mortgage company (if they offer you one) or approach a third party provider.
3. Temporary shelter
In the event of massive property damage or loss of valuables, be it due to flooding or man-made disasters, and your house becoming uninhabitable in the aftermath, home insurance will provide you and affected family members with momentary shelter until it is safe and secure. Some policies even extend accommodation benefits to pets. You may also implement repair and replacements to restore your house to its original condition.
4. Accident coverage
As already mentioned, home insurance covers all kinds of damages, including accidental damages. However, make sure this is a clear provision in your policy. If upon assessment there is proof of accidental damage, you have the leeway to request for a payout to handle repairs and replacements. Because not all insurance companies offer it as a default feature, you can tell your agent or provider to add accidental damage as a rider to your plan.
5. Replacing lost or damaged valuables
The value of possessions tend to depreciate over time. A laptop’s price, for instance, will drop significantly a few years after its release. Check your home insurance policy if it contains a new for old clause so you can quickly repair or replace valuables lost or damaged beyond your immediate control.
6. Coverage for emergencies at home
Home insurance covers a wide range of emergencies. These include burst pipes, kitchen fire, and broken doors caused by theft or burglary among others. You need to resolve these emergencies as fast as you can. Insurance plans with home emergency features enable you to get in touch with a trades person selected by your insurance provider, usually through a 24/7 hotline. If you cannot find this coverage in your base plan, request your provider to add it to your policy.
Nowadays, home insurance is no longer just an option—it is a necessity. The benefits and advantages it offers far outweigh the risks. It is a practical and affordable way to safeguard your property from further damage and loss. When buying your next home or investment property, remember to get a comprehensive home insurance plan for long-term protection.
