Home insurance is a legal requirement if your property is bonded. It will protect you and your home should there be a crisis and cover your home and all the permanent fixtures inside. If an item has been physically integrated into the property and it’s impossible to remove it without causing damage or destruction to the property, then it’s a permanent fixture. For example, water pipes, window frames, etc. Other items which are considered permanent fixtures are light fittings, fitted carpets, and built-in cupboards.
If there’s a natural disaster like a fire, flood, earthquake, or storm, insurance will be able to cover any damage resulting from these types of events. Building insurance is always calculated according to the cost of replacement. The primary goal of any insurance is to make you financially whole after a loss. There are plenty of companies and web pages you can visit to get yourself familiar with home insurance as a whole.
Apart from natural disasters, unforeseen circumstances can occur at any given time.
An example is a burst geyser and any costs of damage (up to a certain amount) caused by the event, like painting or replacing tiles. Home insurance can also cover manmade hazards like fire, theft, vandalism, etc.; however, some exclusions vary from company to company. Exclusions could include damage or loss caused by civil war or insurgence, nuclear activity/radiation, military attack, or terrorism.
It’s important to check your policy documents to make sure that you are, in fact, properly covered. Many Americans don’t realize that earthquakes and flood damage are not automatically covered, and they are only covered in separate policies. Things like mold and sewer backup are also not covered. Policies are often written so that in order for anything to be covered, it must happen suddenly and accidentally. For example, if your roof collapses from old age and not from storm damage, it won’t be covered.
Insurance can cover you for temporary living expenses if your home is damaged until it’s repaired or rebuilt. You can also be protected against liability arising from accidental damage caused by you to a third party on your property.
Two Types of Valuation
You can choose to insure your home based on two types of valuation:
- Reinstatement Value, which will only cover the cost of construction while claiming. This includes materials and labor costs.
- Indemnity Value, where you can claim the insured sum as well as the total premium paid in case of loss or damage to your property. The depreciation value (based on the property’s age) is also deducted from the claim amount.
It’s important to re-evaluate building insurance cover annually as there may be a difference between replacement cost and the property’s market value. A property’s value may increase if remodeling or renovations have been done. When you are making major changes to your home, you need to ensure that your coverage remains adequate.
One of the most important things you can do for your home is ensuring that it’s fully secure. We know that however many security measures we put in place, there are still risks like natural disasters and damage, which are beyond our control. This is where home insurance can give you extra protection and peace of mind. When you are choosing a broker, look for the following: competitive rates, customized plans, expert advice, and good customer service.