Home insurance is the best option for home protection. It provides financial security from many accidents like natural disaster and fire. But there are some things which are not usually covered in home insurance. In such a situation, you should look carefully at the terms and conditions while getting the house insured. This will prevent you from incurring any loss.
It is everyone’s dream to have their own house. To fulfill this dream, people put all their savings at stake. They also take home loans. In such a situation, everyone also wants to protect their dream house. For this, home insurance is very important, which comes in handy at the time of any accident.
But, while taking a home loan, you should pay special attention to which things are covered in the insurance and which things are not.
Who does home insurance?
General insurance companies insure your house. Many things are covered in it. Such as compensation for damage to the house due to flood, storm or fire. But, while getting the house insured, the terms and conditions should be looked at carefully. It is clearly written in which cases you will get coverage and in which you will not.
Commercial use of the house
If you insure your house and then give it for commercial use, then it will become a commercial property. In this situation, your home insurance policy will not cover that property. If you are planning to rent out the house for commercial use, then there is no benefit in insuring it.
Demolition order
If any government authority orders demolition of the house, then also home insurance will not be of any use to you. The government often orders demolition of illegal construction. To avoid this, you should check the documents closely before buying or building a house.
Loss due to poor construction
If any kind of loss occurs due to defects in construction, then also the insurance company can reject the claim. In such a situation, while getting the house built, you should take care that all the materials are of good quality. If the contractor is using a poor quality product, then he should also be refused.
Home Insurance Premium
The home insurance premium is determined based on the price of the house, its location and other factors. Generally, the home insurance premium can range from 0.5% to 2% per annum of the house price. However, one should consult a financial advisor before purchasing home insurance.
