A comprehensive home insurance policy will not only provide peace of mind in the event of an accident, break-in or damage, but will also offer a cost-effective way of replacing lost items or repairing damage that could cost several thousand dollars without insurance. A home insurance calculator will come in handy to help determine the right amount of coverage.
However, there are several types of cover to consider and policy costs can quickly escalate if you aren`t sure what level of cover you really need.
Types of Cover
Building insurance is essential for mortgaged property and covers any damage caused to the structure or permanent fixtures of your home. Policies vary, but typically cover damage by a natural disaster such as an earthquake, vandalism, theft, subsidence and damage caused by a vehicle crashing into the property.
Content insurance is designed to cover the cost of replacing personal belongings that have been stolen or damaged. Content insurance is not compulsory, but if you spend some time in your property going from room to room you will quickly see just how expensive it could be to replace furniture, appliances, clothing, jewellery and electronics in the event of a fire or burglary.
Home emergency cover is available as a standalone policy or as part of your existing package of homeowners insurance. It is designed to be used when you need to carry out repairs to enable essential utilities such as heating and water to operate effectively. Policyholders typically call their insurance provider who will arrange a contractor visit and cover the cost of labor and parts. This insurance is particularly useful if you have vulnerable people at home such as children or you are elderly.
Factors That May Impact Your Premium
Most policies offer a sliding scale of cover to choose from and it can be tempting to opt for basic cover as a way of keeping the cost of your premium down, but this may cost you more in the long-run.
Optional add-ons include accidental damage cover, which will allow you to reclaim the cost of an item if you break it unintentionally and cover for the structure of and goods contained within any outbuildings.
The cost of content insurance will also be impacted by any valuable items you own. Most policies will stipulate a maximum amount of cover per single item with the option of increasing cover for individual items of value such as a painting. If you own several high-value items it is likely that the cost of your premium will increase significantly.
You can also choose to cover the cost of any damage done by pets, which isn`t typically covered as standard. However, if you hold a pet insurance policy it may be worth checking whether it includes cover for damage to personal property.
Assessing the Level of Cover Needed
When choosing your homeowners insurance consider what options are likely to be of benefit to your personal circumstances. For example, accidental damage cover may be cost-effective for those with small children or DIY enthusiasts, but less attractive to those who don`t spend a lot of time in their property.
It`s also important to ensure you are not over-insured, which would push up the cost of your policy, or under-insured, which could leave you with expensive repair bills. Using an online homeowners insurance calculator will help you to assess the value of your belongings and allow you to compare the cost of optional add-ons before committing to a specific policy.
Additionally, if you find yourself in a situation where your current cover doesn`t meet the cost of an incident that has already occurred, you may wish to utilize an online loans calculator as a means to get your property back into shape before upgrading your home insurance.