InvestorQ : Are there any tips for choosing the right home insurance policy?
riya Ranade made post

Are there any tips for choosing the right home insurance policy?

Nishita Gala answered.
3 years ago
Choosing the right home insurance policy is almost as important as choosing the right home. Home insurance is, after all, the peace of mind that will help you combat all your worst-case thoughts after you’ve purchased your cozy home. With the numerous options of insurance providers to choose from, here are a few factors that can help you zero in on the best insurance plan for you: Determine how much insurance you want You must always insure your home for its replacement value and the value at which you bought it. Your insurance cover should reflect what it would cost to bring materials to your home site and rebuild it, if its damaged. This is because your home will likely cost more to rebuild because of inflation. If your home is on a large piece of property, be aware that the insurance company isn't insuring the land, so the amount of your policy may be significantly less than what you paid for the home. Check your premium amount as well as coverage provided You must objectively evaluate the various risks your home is facing or might face in the future. Let’s say your home is built on a flood prone area then you should ensure that your home insurance policy is covering these risks, too. Furthermore, your premium amount should fit your budget. For this purpose, you can seek quotes on likely premium amounts from various insurance providers and then compare which one you can afford the best. Check claims settlement ratio Ensure you company the claim settlement ratio (CSR) of an insurance company with its peers. CSR is an indicator of how much claims the company has settled in a financial year. Understand what's covered and what’s not Homeowners insurance typically covers the structure of your home and personal contents. Few companies also cover living expenses in the event your home is damaged, and you are temporarily displaced. These coverages often have various limits in standard policies but can be adjusted by paying more. Bear unusual circumstances in mind Most policies protect you against fire, lightning strikes, wind or hail damage. Losses from vandalism and theft are also typically covered to varying degrees. Other coverages may be included, too. You should check the list of the perils that are covered by your policy and make sure you understand them. Flooding and earthquake damage typically are not covered but you can buy coverage separately. You should consider if you're in an area prone to such disaster and weigh the cost with the risk. Furthermore, damage caused by poor maintenance, mold or termite infestation are not covered. Review factors that can cut your premium amount You can reduce your premium amount by raising your deductible amount, or the amount you as a policyholder pay out of your own pocket before an insurance company pays any expenses. Taking more than two insurance policies from the same company can earn you some discount. Installing smoke detectors, burglar alarms and deadbolt locks can help save further. Opt for a trusted and reputed company Your insurance company has to have competent customer service representatives who are capable of resolving your queries quickly. Thus, it is important to choose a company who is well equipped to assist you at any point of time.