Home insurance is one of the most important aspects of becoming a homeowner. It not only protects your home in instances of severe damage, but it may also cover the injuries of any person that is harmed on your property. Between floods, break-ins, and fires, anything is possible. It pays off to be protected. The insurance industry can be challenging to navigate, so if you’re in the market for a new home insurance policy, you may think, “What are my options?” Thankfully, the basics are relatively easy to cover. There are several ways to go about protecting your most treasured asset.
Home Insurance
Home insurance refers to the insurance coverage that applies to repairs or replacements after damages occur. Policies vary in scope and pricing. For this reason, selecting an insurance plan that covers everything you need and leaves out any additional and unnecessary expenses is vital. Home insurance typically covers the house itself, any fixtures inside the home, and the plumbing. This type of insurance can also cover legal fees if someone is injured on your property or inside your home.
Contents Insurance
Contents insurance covers all household items and personal belongings. Your furniture, electronics, clothing, jewelry, and anything else you keep inside your home will be included in contents insurance. Contents insurance can be a standalone plan, but it is often bundled. Most commonly, contents insurance is bundled with the home mentioned above insurance.
Sum-insured Cover
There are two primary types of home insurance in Australia. First, there is the sum-insured cover. This type of insurance is based on the estimated cost of rebuilding your home if destroyed. Sum-insured cover home insurance can also be backed by a “safety net.” This safety net requires your insurer to add a percentage to your sum-insured amount should you suffer a total loss.
Total Replacement Cover
Everyone can benefit from the total replacement type of coverage since it is the most comprehensive. However, people living in areas especially prone to natural disasters may benefit from it the most. Total replacement covers the cost of restoring your home to the same standard it was before the damages occurred. In other words, the repairs must be comprehensive enough to convert the house to its original value.
Choosing a Home Insurance Type
In addition to these categories, home insurance varies based on insured events. Make sure your insurance plan covers anything likely to happen to your home based on location and situation. For example, if you live in California, you may benefit from the added security of fire insurance. Conversely, a homeowner in coastal South Carolina may require flood insurance due to living below sea level. It can be helpful to use a comparison tool like the one on iSelect’s website to identify areas of strength and weakness across many plans.
When browsing the home insurance market, there are a few things to remember. First, make sure your premiums are affordable for your budget. Then, select the insurance type that best suits your needs. Compare and contrast your options to decide which exclusions are viable and whether or not any excess costs exist. The insurer’s cover limits are also important to examine. The cover limits refer to the maximum price you can claim for. It is dependent on the item that is insured. Using an insurance comparison can help narrow your research down for you. You may consider obtaining an insurance quote once you’ve eliminated a few options. A quote will give you perspective regarding what the insurer is willing to cover and how much their services will cost you.
