Your house is probably one of your most valuable assets. Since your house provides shelter for you and your loved ones, home insurance should guarantee that you will never be in a position to lose it. Home insurance may be divided into two main categories: building insurance and content insurance.
Building insurance protects you from and covers costs due to future damages that might occur to the house's basic structure or components. This includes the infrastructure of your house and anything affixed to the structure of the home.
Content insurance, on the other hand, covers your belongings that are located within the house borders and are not considered part of the integral structure.
Home Owners Insurance: Premium Basics
Can you afford replacing a burnt down kitchen? Possibly so, but would you really like to?. And what about covering a burnt down house? Umm... now that may already be too much. The difference between a burnt down house and a damaged kitchen may be only a few minutes, but the escalation in cost is tremendous.
Building insurance can cover both incidents, regardless of the cause, be it a common household accident or a major catastrophe. Building insurance will cover a variety of things like fixtures and foundations, doors, windows and even kitchen cabinets. Content insurance covers portable furniture and other personal possessions such as jewelry and electronic devices.
How Property Insurance Premiums Are Determined
The cost of home insurance differs depending on the quantity and quality of the features included in the policy. It also depends on the deductible percentage you are willing to pay in future claims. The basic cost of the premium is usually calculated via two methods.
The first method involves the evaluation of your home's or contents' worth and paying a yearly premium relative to your evaluation. The other method would be to calculate your home's value based upon the number of rooms, a simpler but probably more expensive method. For the first method accuracy is of great importance, over or underestimating your possessions will cost you no matter how you look at it.
Premiums are also based on parameters that are mostly out of your control such as your postcode or changes in the value of the real-estate market. Other, somewhat fixed parameters are your house's construction materials and its age. Although the parameters mentioned above are fixed there are still some measures you can take to reduce the premium.
Your Habits and Home Use Matters
To determine the premium, your insurer will ask you questions about your and your family's weekly routine. The insurer will want to know if the house is occupied during the daytime or if it is empty for a few hours every day. He will want to know about your vacation habits and if you have a watchdog. The security devices you use for protection are also very important and they will certainly play a major part in determining the height of your premium. Other significant features are your claim history and current employment.
Choosing a Home Insurance Provider
It is important to give accurate information while dealing with the insurance agencies, as insurers will try to find flaws and complications in your report in order to economize their expenses when it comes time to pat your claim in the future. Once you have summarized all of your insurance requirements and needs, try to get as many quotes as you can.
Remember to contact insurance companies that already have you as their client for life or auto insurance. Chances are you'll receive a considerable discount. In addition, it is preferable to purchase building and content insurance from the same firm. After receiving quotes from various insurance companies do not automatically choose the cheapest quote that you receive.
It will be wise to look into the company's history and reputation. Liability plays an important part once you make a claim. Check out our "how to reduce your home insurance premium" article for further information.