You make a huge financial investment when you buy a home. So, you should ensure that the property is well protected from any damages. This is why you need to purchase a home insurance policy. It is also referred to as homeowners insurance.
This article discusses about the types of coverage offered and how to save money while purchasing a homeowners insurance policy.
Home insurance – Types of coverage offered
A standard homeowners insurance policy offers the following coverage:
1. Property protection coverage
As the name suggests, homeowners insurance provides protection to the primary as well as the detached structures of your house. Thus, a basic policy covers the garages, driveways, patios as well as the built-in appliances, such as, electrical wiring, air conditioning systems, etc.
Along with providing coverage to the property structures, your home insurance policy will also cover your valuable personal belongings if they get stolen or damaged by fire or any natural calamity that is listed in your policy.
2. Protection from liability
Homeowners insurance provides coverage for lawsuits due to a damage caused to any third party when you, your family members or your pet are responsible for it. The policy also covers the costs of medical treatment if someone gets injured in your house.
Apart from above, a home insurance policy also covers certain additional living cost. As for example, if your home gets damaged due to a natural disaster, then your policy will cover the cost of staying away from your house for a certain period. It usually covers the restaurant and hotel bills till your home is rebuilt.
Home insurance – How to save money on a policy
You can save money on your homeowners insurance policy in the following ways:
- Raise the deductible amount: It is possible to save a substantial amount on your premiums if you raise the deductible amount.
- Shop around and compare policies: You should never buy a policy without shopping around properly. While comparing policies, make sure you weigh the coverage against the premium cost of your home insurance.
- Install home security devices: Most of the insurance companies will offer discount if you install burglar alarms or smoke detectors in your house. However, compare the cost of these devices against the amount you can save on premium.
- Take precaution against natural disaster: You can save a considerable amount on the premium if you make your home resistant to natural disasters. As for example, you can put storm shutters or use strong roofing materials in your house.
- Consider buying a new home: Usually, insurance companies charge comparatively lesser amount to insure a home whose heating, plumbing and electrical systems are relatively new, that is, not more than 10 years old.
- Buy multiple policies from an insurer: Most of the insurance companies offer discounts when you purchase multiple policies from the same insurer. However, you need to look for a relatively big company that offers multiple insurance policies.
If required, discuss with your insurance agent regarding what measures you can take in order to reduce the premium cost of your home insurance policy.