Any type of insurance can be expensive, and home insurance is no exception. When looking to cut back and save money, insurance can seem like an easy place to cut back a few extra dollars, but what's the real cost if something then goes wrong?
On basic policies, it can be very hard to get the money you think your claim deserves. The purpose of basic insurance plans is mainly to prevent catastrophic loss, but more robust insurance plans are designed instead to protect you from any amount of significant loss whatsoever. Here are a few considerations to make before taking out a new home insurance policy, which will help make the decision easier.
Types of Coverage
Different policies will cover different things—such as just the building, or the building plus the contents inside—and different types of situations in which you might need to make a claim such as flooding or fire. If you opt not to cover accidental damage, will you be able to afford any damage costs if you, say, forget to blow out the candles after dinner?
Paying less for home insurance is almost guaranteed to pay less if you need to make a claim. The less you put in, the less they pay out. A top-of-the-line home appliance that breaks down may only be covered for a fraction of its value, and then you would need to pay the rest to replace it.
What Isn't Covered?
It isn't only the payout amounts that are lowered in the minimal home insurance policies. Fewer things will also be covered than when you have a more comprehensive policy. The appliances may be covered, but the furniture may not be. Or possibly items that are older than a set number of years old will not be covered. Or items that you don't have proof of purchase for may not be covered. The list is endless for things they may not decide to cover.
Affordability and Peace of Mind
While it might be cheaper in the here and now to take a lower policy, for the cost of sometimes only a few more dollars more, you could have complete peace of mind. Everything in your home would be covered, and most, if not all, scenarios would be protected against. The extra cost right now might be worth the easy sleep knowing that whatever happens, you're covered. Speak to an insurance company for more information.