Tips For Lower Premium - Home Insurance Plan

Home Insurance

Your house is your prized possession and it's of utmost importance to safeguard this property against all calamities and damages. Owning a home involves a lifetime investment. If the house is bought with borrowed funds from Banks or Financial Institutions, then a mortgage is created in favour of the Bank.

All Banks make it compulsory for the borrower to have a proper 'home insurance' cover. The fact is that nobody is 100 percent certain about which plan to choose and which company to visit. Then, what are the factors to be taken into consideration to avail an excellent insurance cover for your house? 

You must be confident that the Insurance company will process your claim quickly and with sympathy in case something happens to the house and for this you are going to bear a significant amount towards premium. Premium of a home insurance cover also involves quite a lot of money and depends on a number of factors. You may avail the opportunity of a lower premium by taking into account a number of factors under your control before selecting an appropriate home insurance policy :

• Extent of Coverage 

Various types of home insurance policies have been designed by insurance companies to suit various situations. They include from a mere cover to protect the house against natural calamities such as earthquake,  fire, flood, theft to a comprehensive cover for new fancy highly priced houses.

When you select a house try to collect as much information as you can regarding its structural condition, plumbing work, electrical wiring and any other important information you would need to arrive at the amount of insurance cover required.

One has to keep in mind the rising cost of building materials and labour to calculate the amount of coverage. You can avoid paying an unnecessary high premium by deciding beforehand on actual requirement of coverage suited to your home.

If you have carried out a major renovation of your house, inform the insurance company immediately because it may affect the replacement cost of the house keeping in mind the rising material/labour cost of present days. Replacement cost is the value one would need today to rebuild an older home right from the foundation level and it may differ significantly with the market value.

• Modern Gadgets can lower Cost of Premium

You may also lower your premium to some extent by adopting safety and prevention measures in the house. Insurance companies charge lower amount of premium if the house is fitted with modern security gadgets like 'fire alarm', 'burglary alarm' and there is a 24 hours security system as we find nowadays in modern housing complex. Keeping a 'fire extinguisher' at home easily accessible by all is another added advantage. It reduces the risk of an outbreak of fire significantly.

You may also enquire if the insurance company has 'auto insurance' and 'health insurance' policies also. Various companies offer a discounted rate of premium if the client takes a number of policies simultaneously. Then you can save some money by way of discounts.

• Pay in Advance

Almost all insurance companies allow rebate to the client if the 'assured' chooses the payment mode as 'half-yearly' or 'yearly'. Monthly payment of premium always involves an extra amount. Besides, if the due date is over, then a fine is levied. To avoid this, one time payment of premium is always preferable. It not only saves cost but also trouble. 

• Preventive Maintenance

House owners who keep their homes in tiptop condition by repairing minor problems like plumbing, painting or plastering have to pay lower premium instead of those who file repeated claims for minor problems. The objective of a 'home insurance policy' is reimbursement  in case of unexpected major loss. Home owners who file frequent claims for minor reasons regularly have to bear higher premium. 'A stitch in time saves nine' -regular maintenance always averts a sudden major expenditure too. 

•  Keep all Documents Up To Date and Handy

Keeping all documents of the house up to date and handy is desirable in the sense, if anything unforeseen happens your insurer will need up to date records of the 'structural condition' of the house and its contents to process your claim faster. Keeping a list of all high value items in the house including cash/bills is essential. Thus, keeping all the records handy is highly beneficial.

• Geographical Advantage

A house situated in a hilly area / in an 'earthquake prone' area or sea side attracts a higher premium. Whereas, a house located in a city in the plains or rural area draws lower premium.

• Floater for Complete Coverage

A standard home insurance policy usually covers loss and damage to the structure of the house and some of personal belongings but never covers high valued items such as 'antique' items, jewellery. While applying for the home insurance you may opt for a 'personal articles floater' with a little extra amount of premium. In this way you may ensure protection to your priceless 'high valued possessions'.

• Selecting a Reliable Company

There are innumerable number of companies who offer policies on various products. A client always expects that the insurance company will consider his claim with sympathy, will not harass and process the claim quickly. Unfortunately this is not the case with all institutions. Therefore, one has to pick an insurance company carefully with most positive rankings on customer satisfaction and financial soundness. Also review the history of the company's complaints records.



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