You get a call at work that your house is on fire. With your heart beating and palms sweating, you drop the phone in shock and frantically rush home to meet a charred building with smoke rising to darken the overhead sky. As you stare at the skeletal remains of a place you once called home, one thing keeps coming to your mind; you do not have home insurance.
Home insurance is a type of insurance that covers your home in the event of loss or damages. It is under an insurance umbrella called property insurance, and there are two policies under it.
The first is a homeowner policy that covers your house to the extent that if the damage extends to your neighbour (for example a fire outbreak), they get covered too.
The second is a householder which includes the contents in the house like personal effects, valuables, and household items. Put in simpler terms, the owner of a building can take a homeowner policy while the person renting it can take a householder policy.
Five Things To Look Out For In Home Insurance
Now that we have explained what home insurance is all about, here are five things to consider before you decide to apply for home insurance in Nigeria.
1. Budget
A significant factor to consider when taking home insurance is your budget as it determines the type of policy you get. You should not regard home insurance as a frivolity; instead, see it as a necessity. In your search for a plan that saves cost, be careful to get the right one.
2. Limit on Policy
Typical home insurance will cover damages that occur internally and externally, injuries that occur on the property, and loss or damage of assets. But, like most policies, there are exceptions, and some of these include acts of war or natural disasters (you never know when mother Earth decides to make a point). However, there are ‘special’ kinds of policies that provide indemnity against these events. For a business setting, you would need professional indemnity insurance.
3. Location
Your house location is also a factor to consider when taking home insurance. Living in an area prone to erosion or one that is dangerous, the home insurance policy will be relatively higher than in stable regions.
4. Contents in your Home
Be sure to take a proper inventory of everything in your house. From cars to appliances, furniture and keys, nothing is too small to be covered under home insurance.
5. The Excess
Excess refers to the claim value below which the insurer will not pay. Put in simpler terms; it is the amount of money you spend in the event of a claim settlement. It is the insurer’s way of making sure you are not purposely careless so you can make claims on the insurance. These policies usually have a mandatory and voluntary excess. Paying higher excess lowers the price of your cover, and in that way, both parties get surety.
Conclusion
Taking home insurance is one of the smartest things you can do to protect your investment. But, before buying a cover, we recommend doing proper research and getting the services of an insurance broker. To find out more on how to get home insurance, click here.