Whether you are a homeowner or interested in buying a house, your house will probably be your most valuable asset. To protect your property, you can get yourself a large breed puppy (or two) and train it, or you can join the best security company in you area and sign up for all the services they have to offer. Both these are excellent ideas, but it will not protect you from unexpected loss or damage.
Home insurance can be costly, but are you willing to take the chance of not being able to claim for what was stolen or damage to your home. Your house’s value reaches far beyond a construction and its inhabitants. Everything you value are probably kept in your home. There are three types of home insurance. These are namely, homeowners building insurance, home contents insurance and personal valuables insurance.
Homeowners Building Insurance (Building Insurance)
This policy specifically covers the building structure of a home against accidental loss or damage caused by fire or theft, or by natural disasters such as floods. This cover can usually be extended to include your garages and swimming pools, etc.
Home Contents Insurance
This policy covers what is inside your house and is designed to cover your household goods against loss or damage caused by burglary, theft and fire or natural disasters like flood damage. Household goods include clothing, furniture, curtains and home appliances.
Personal Valuables Insurance
This is an independent policy that is separate from your homeowners insurance and home contents insurance. It only covers your personal valuables, e.g. handbags, jewellery, laptops, etc. that you would wear or carry outside of your home. The policy includes two types of cover, i.e. specified and non-specified items. With the specified items policy you can insure your most expensive items, such as laptops and cell phones, against accidental loss or damage. It will compensate up to the amount specified in your policy schedule. The non-specified items policy will cover a standard list of general items. It will pay out up to a certain amount in the instance where loss or damage occurs.
Is Home Insurance Compulsory?
Any bank or bond originator will require that you take out a comprehensive insurance policy to the value of your home. This will protect you and the bank from any structural damage to the property. You don’t have to take the homeowners insurance that your bank offers, but you will have to prove that your house is covered by insurance.
Home Insurance and Life Cover = Peace of Mind
No homeowner is exempt from unexpected damage or change in financial circumstances. With home insurance in place, the repairs can be done, and your house maintained. In the same way, life insurance will cover death, disability and critical illness. There is no price tag to peace of mind about your family’s future.
The value of Life Cover
Even if the bank or bond originator don’t require it from you, are you willing to take the risk? With life cover in place that covers your bond amount (and possibly your debts), your spouse and/or children will not lose your family home, or have to deal with serious decisions regarding the house, during a very difficult time.
If you already have life insurance, you should check if the amount will cover your home loan. If not, you should take out additional life cover. Life cover should be a priority, whether you own a property or not. You can always reduce your life cover on your bond annually, as the outstanding amount on your bond becomes smaller.