Home Insurance is a considerate insurance product that provides coverage for any loss or damage to the property. Although house insurances are frequently bought insurance by property owners, there are various myths about them. Many owners believe that the insurance provides coverage for literally any damage to their homes or content in them. In reality, home insurance has certain exclusions as well as constraints. This article will bust the 5 myths about home insurance.
Premium- the dwelling ground for myths
There are several myths around the premium of house insurance, however, two of them are most common.
The first- With each claim, the premium goes up. Although multiple claims result in increased premium, a single claim may not increase the premium. The best way to avoid it is to estimate the cost of loss before the claim. This way the insured will have a clear idea of whether to claim or not
The second- High premium means the best security. The insurers tend to give discounts in premium if the houses have been built by considering general safety precautions like fire alarms.
The insurance will provide expenses in case of Loss-of-Use
Many property insurance bearers believe that if their houses are damaged beyond use and they have to reside in the hotel, their policy provides all the expenses of their temporary residence. However, if it not explicitly mentioned in the policy, the insurer never provides coverage for Loss-of-Use. The policyholder has to spend money from own pocket for hotel charges, meals as well as the room service.
Property Insurance = Replacement cost
The insurers pay for the losses of the content or property based on their current value, not on the value at the time of their purchase. For instance, if a five-year-old television of Rs. 15,000 turned into ashes by fire, the insurance holder will get the amount worth its condition before the fire which might not be enough to replace it.
The act of God!
The catastrophes like flood, earthquake and such natural disasters are included in some policies (home content basically) whereas excluded from the other home insurance policies. The commonest of them is a flood, which can be a result of multiple causes like heavy rains and even artificial reasons like sewer clog. There are some insurers who provide special insurances for natural calamities, especially flood.
Home insurance is only for homeowners.
Though home insurances are meant for property owners to protect their houses, tenants also can purchase them for the contents in their home. Furthermore, in case a tenant relocates, they can get continue with their policy simply by changing the address.
The home insurance policies vary insurer to insurer as well as the plan to plan. In order to get a plan with satisfactory coverage, one must carefully read and understand the policy before buying.