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How to Insure Your Home

How to Insure Your Home?

It is a well known fact that buying a home is probably the biggest investment you will ever make and one you will surely want to protect. If you are wondering how to insure your home to safeguard against fire, theft or damage, there are few things you should understand about home insurance and exactly what can and can’t be covered.

Do I Really Need Home Insurance?

No one likes to think of their homes as vulnerable because that is our castle, our sanctuary from the outside world. Unfortunately, even the mightiest of fortresses can be brought down and this is why it is so important that you carefully consider purchasing adequate cover to replace your home if it should suffer damage or complete loss.

As well, many mortgage lenders require you to carry adequate cover simply to protect their investment. We could learn from them. Whether your home is paid in full or carries a mortgage, you should protect your investment in the same way mortgage lenders do.

How to Insure Your Home

What Does Home Insurance Cover?

This is an area in which many homeowners get a bit confused. Home insurance cover generally refers to the structure itself and if you want to insure the contents within there is an optional contents insurance cover.

So what does home insurance cover? Depending on the type of policy you purchase, a typical home insurance policy covers the building itself as well as any fittings or fixtures that are permanently installed.

Here a word of caution is in order. If you intend to make any structural changes to your home, notify your insurance company well in advance because you may be required to carry a larger policy. Also, structural changes may nullify your existing policy. Take the time to check before you do the work!


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What Does Home Insurance Protect Against?

Typically, when asking how to insure your home you will want to know that the policy covers a minimum of fire, theft and what is commonly referred to as an Act of God or Act of Nature. This would include such things as storms, floods and lightning. Bear in mind that unless you carry optional contents insurance either as added cover on your home insurance or as a standalone cover, the only thing which will be covered is the structure itself.

Most home insurance policies protect against such things as burst pipes (water damage), fires within or from outside that cause partial or total loss of the structure, and things of that nature. In terms of theft, only theft of structural components might be covered on home insurance policies. Each policy is different, so make sure you understand what is covered before you sign on the dotted line.

Purchasing the Right Amount of Cover

When you are looking at how to insure your home, the most important factor is how much cover you will need. A good rule of thumb to go by is the value of your home in current market conditions. In the industry this is referred to as ‘replacement cost.’ How much will it cost, in today’s market, to rebuild a structure comparable to the one which was destroyed. If in doubt, it is always wise to carry a bit more than you ‘think’ you need, simply to ensure that you have adequate cover if the market changes at any time during the year between enrolment periods. If you have a mortgage, your lender will quite likely advise you how much you are required to purchase.

Home insurance is one of the most important types of cover you should carry because within the blink of an eye you could be left without a roof over your head. The cost of home insurance will depend greatly on the amount of cover you need, but to be without adequate insurance is foolish. Remember, this is probably the biggest investment you will make in a lifetime, so find a home insurance policy that can guard against the loss of your home. Optional contents cover is good as well, but at a minimum, carry home insurance at all costs.


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