Your home is the center of your daily life, and likely your most valuable asset. In this article, we’ve listed the three main categories typically covered by home insurance.
1. Your contents
The contents of your home might be more valuable than you think! One of the best ways to get the right numbers is to walk round your house room by room and make an inventory of all items. You should include everything you would need to replace if you had a total loss
To assist you in estimating your home’s contents, we've grouped home items into three sections:
Items in the first column usually depreciate in value with time and we recommend insuring them based on an estimate of their new replacement values. Items in columns two and three might maintain, appreciate, or depreciate in value over time, so we usually insure them based on a pre-agreed value. Luxury houses can contain wine cellars with hundreds of bottles. So if you own a large and valuable array of wines, include them as well.
Contents are usually covered against theft, fire, smoke, earthquake, floods, water damage, and other weather-related-damages.
2. The House’s structure
This part of home insurance covers damage to the primary structure of the house including the cost of rebuilding it if necessary. If you’re a homeowner, your home insurance policy would pay for repair and replacement of material damages to your home. If you’re a tenant, it also covers material damages as part of your liability towards your landlord.
The most important factor here is to estimate the cost to completely rebuild the house if it were destroyed beyond repair. This estimate will depend on its structure, as well as its size, and is often considerably lower than the market value. However, it still needs to be enough to cover the cost of all the labour and materials required. Of course, a large home in a newly built building with high quality flooring materials will definitely have a higher replacement cost than a small home in an old building with standard flooring material.
The structure of the house is usually covered against fire, smoke, earthquake, floods, water damage and other weather-related damages.
3. Your liability towards neighbors and third parties
Covering more than the structure and contents of your house, this policy extends to cover your legal liability to your neighbors and to third parties.
Your liability is usually covered against fire, water damage or explosion originating from your premises to your neighbors. And extends to cover an accident that leads to a bodily injury or property damage to third parties.
Having a home insurance policy won't prevent accidents from happening; a home insurance policy reduces the financial burden if the unexpected occurs.
Moreover, setting up the policy properly is as important as the policy itself. In order to make an informed decision on what type of policy would be the most appropriate for your most valuable asset, just reach out to any of our team members by clicking below.