Insuring a home is often seen as a hassle. A necessary hassle, but a hassle non the less. Buyers fill and sign the necessary forms, make the payments and then tend to not give insurance any more thought, that is until something bad happens, and then most of the times you end up wishing you had paid more attention to that so called ‘hassle’.
For most people a home is the largest and most valuable asset they will ever own, and when faced with the inevitable risk of it being damaged or destroyed, it’s crucial that the right insurance be in place.
According to insurance practitioners, the most common and most serious mistake people make, is that of not paying enough attention to the difference between market value, and replacement value. Market value is the amount the property will sell for, while replacement value is the amount of money needed to restore the property to its original condition, and that’s why this evaluation is typically substantially higher than the other one.
Reviewing insurance policies periodically and understanding them is therefore extremely important. Think of how different your life would be in the unfortunate event a fire struck your home, and if you were faced with understanding the difference between market and replacement value only in that moment.
Get your money’s worth
Depending on the surrounding and circumstances of the property, check on the risks the policy protects against, and also make sure it contains specific reference to particular features that add significant value to the home (for example expensive tiles or panels).
To sum up your aim is to cover all the risks your property could be involved in, and make sure you are protected enough to get your home back to its original state by always having a thorough and updated insurance policy.
It may be a lot of paper work to read through, and it may at times be difficult to understand all the technical terms, but take your time and have everything explained until you know exactly what you are signing. The time you spend filling out your policy and reading through it all, will be nothing compared to what you risk loosing.