Ironically, Home Insurance is one of the most common types of insurance, but also one of the most miscalculated. Majority of property holders reckon that the schemes they purchased will indemnify them against virtually every loss/ destruction incurred to the building and everything in it. The truth is that any such scheme is bound to have some exclusions and limitations that will leave you with a sizable gap in riders.
Let’s crush some of the common myths about home insurance:
If your house is damaged beyond repair or is impossible to inhabit at the moment while it is being renovated, it is possible that your insurance provider will accommodate you in a hotel or service apartment temporarily. But this is not true for all house insurance plans and if you end up shelling out for all these expenses, you will soon be in huge financial trouble. Please go through the plan carefully and see to what extent the insurer will support you and for how long.
Expenses to restore/ replace/ renovate:
Many tend to take it as a given that expenditures to replace your lost or destroyed belongings in the house. For instance, you may think that your three year old washing machine damaged in fire or burgled, it will be replaced as per the coverage. But did you know that a bulk of insurance schemes do not have this option at all. If not incorporated, losses will be gauged at what the item was worth right before the accident. And evidently you will have to cut your losses and settle for the current depreciated value, which will be nowhere near the price for a new one.
About Flood Protection:
Practically every home insurance plan omit coverage against flood coverage, along with quakes and other natural catastrophes. This is unfortunate as it is one of the most common causes for deterioration of your house as well as ruining of contents. Floods can occur due to several reasons, such as a storm, ruptured pipes or drainage stoppage. Only a few firms include flood cover in their scheme. And if you are residing in a vulnerable region, it would be a good idea to go for a distinct flood plan or rider on additional premium.
Any building with wood is susceptible to termite attack if not taken care of properly. And they are quite caustic and especially attack your house during cold weather. Termites feed on wood and more of it. They can eat away the wooden support in the house as easily as cows chew on grass. They multiply in huge colonies and can ruin the house structure together in time. Revamping termite destruction and getting rid of them can cost thousands of rupees and very few policies cover them. Hence it would be wise to have your house checked and squirted by an expert rather than relying on home insurance.
Assessment of Loss:
When you file for a home insurance claim, the insurance firm will send you an evaluator to decide the degree of the harm occurred and the ideal way to solve it. The evaluator will estimate a value based on usual factors like trending expenses and upper limit of what the company offers. But you do not have to accept the value offered by them if you feel that you are getting a raw deal. Keep your bills, receipts, photos of items etc. safe as they will come handy for further negotiation.
When it comes to insuring your most valuable asset, give no room for myths, misconceptions or vagueness. Reading the fine print may seem painstaking, but is better in the end as you know what you are signing up for. As mentioned above, not all risks and dangers can be covered and hence take regular maintenance of your house seriously.