Buying a home is an exciting time, but in all the excitement, it’s important not to neglect your home insurance. Your home is one of the biggest investments you’ll make in life, and it sure is worth protecting. The following is a guide to ensure you get the best coverage possible.
Understanding the two types of home insurance
Building cover
Building cover protects the actual structure of your home and everything crucial to it, like cables and switches, pipes, and even connected and fixed appliances like a stove. Your building cover also protects any other structures adjacent to the home, like fences or a garage.
Content Cover
Your possessions are not protected by your building cover. If there’s a flood and you only have building cover, your insurance will cover the structure of the house and any damage to wiring or some appliances, but it will not protect the loss of things like furniture, clothing, carpet, or computers. This is covered by home contents insurance.
When do I need home insurance?
In some cases, your mortgage provider may require you to get home insurance. If that’s the case, you’ll need to fulfill this requirement before you can finish and sign on the dotted line for your mortgage. Even if your mortgage lender doesn’t require, though, you still should get home insurance before you move in.
While it’s unlikely anything will happen within the first day or two after you take possession of the home, insurance is there precisely to protect you from what is unlikely and unexpected, like theft, storms, or burst pipes. You should always have peace of mind that your valuable investment is protected, from the first moment it comes into your possession.
Some things to know
Read the fine print
Some building insurance may cover your garage, but another may not unless you get it specified. The details may also be different depending on whether your home is a standalone or part of a larger property. Make sure you know exactly what you’re paying for.
Claim special items
When it comes to contents insurance, there are limits for how much you can claim for certain items. If you have something that is particularly valuable, like a piece of heirloom family jewelry, it’s usually smart to specify that piece individually and insure it for a higher value.
Additional coverage
You should also be aware that when you take your valuables out of your home, your content insurance usually doesn’t cover them. That gorgeous necklace may be covered against the thief who breaks into your house to steal it, but it won’t be covered from the thief who grabs it off your neck on the street. You’ll need to add additional coverage to protect your belongings when you take them out of the house.
How much home insurance do I need?
A good rule of thumb is that you will need enough coverage to rebuild your home in the event of a worst-case scenario. Your building insurance won’t cover the contents, so you would only estimate the cost of rebuilding the building itself without reference to land or contents.
How much content insurance do I need?
This will vary depending on what your personal belongings are worth. Some policies also let you choose a “new for old” policy. This means the insurance company will replace your old lost item with a brand-new one. If you work from home and your personal computer is essential to your business, for example, traditional insurance would only reimburse you the value of your computer as it was when lost, while new for old will actually get you a new computer.
Protect your valuable investment today and compare home insurance policy choices with iSelect. You deserve the peace of mind.
