Worry-free living, how do you do that?
There’s nowhere on earth that’s as comfortable as your own home. Your bed, your belongings, it’s the perfect place to be yourself. Relaxing while listening to music, cooking for the family, or comfortably sitting on the couch watching your favorite tv show, there’s just no place like home.
Unfortunately, sometimes things can go wrong. Flooding after a heavy rain shower, a small kitchen fire, or an unpleasant break-in. These things can happen and can often lead to unexpected financial consequences you may not be prepared for.
Luckily, it’s very easy to get insurance for these types of events, so you can live in your home worry-free. This article will provide some answers to frequently asked questions about home insurance:
- What’s the difference between home insurance and contents insurance?
- Am I automatically insured in the event of a burglary, or do I need to get separate insurance for this?
- I live in a rental home, what kind of insurance do I need to get?
- How high is my deductible in the event of a catastrophe?
- Am I insured for the right amount?
What’s the difference between home insurance and contents insurance?
- Home insurance covers the building and everything that goes with the building, such as a shed or a garage, kitchen cabinets, toilets and sinks for example.
- Contents insurance insures almost everything inside the building that is not part of the building itself, such as a tv, furniture and clothing for example.
So, if a home gets broken into, the broken lock or window would be covered by the home insurance policy. If things are stolen from inside the home as well, this would be covered by the contents insurance policy.
Am I automatically insured in the event of a burglary, or do I need to get separate insurance for this?
- Basic home insurance provides coverage in the event of fire, lightning strike, or explosion. You can get additional coverage for things like burglary, storm, flooding etc.
- With both the home insurance and contents insurance, you can insure yourself against damages incurred by burglary. Your contents insurance would provide coverage for your stolen items. Your home insurance would cover damages to the building itself, as well as coverage if part of the building is stolen, such as a window, roof tiles, or a garage door.
I live in a rental home, what kind of insurance do I need to get?
If you live in a rental home, you need to get contents insurance. This insurance will provide coverage if your items are stolen. Damage to the building caused by the burglary would be at the expense of the landlord. He can claim these damages through his home insurance policy.
How high is my deductible in the event of a catastrophe?
A catastrophe is a disaster of such big proportions that it can often have devastating consequences for a lot of people. There are different types of catastrophes:
- Natural disasters, such as storms, hurricanes or earthquakes.
- Man-made disasters, such as riots and terrorism.
If your home insurance or contents insurance includes coverage in the event of a catastrophe, there is always a deductible equal to 2% of the insured sum of the home, with a minimum of f 1,000.
- Did you insure your home for f 350,000 for example? You will have a f 7,000 deductible in the event of a catastrophe. This means that you will have to pay f 7,000 out of pocket.
- Did you insure your contents for f 100,000 for example? You will have a f 2,000 deductible in the event of a catastrophe. This means that you will have to pay f 2,000 out of pocket.
It is therefore smart to save up some money for events like this so that damages can be remedied quickly.
Am I insured for the right amount?
- If you suffer damages and you find out your home or contents are worth more than what you are insured for, this means you are underinsured. This can be detrimental to you because the reimbursement amount will be lower than the actual replacement costs. For example: Your contents are insured for f 40,000, but the actual value is f 80,000. You are only insured for half! Suppose that you incur f 5,000 in damages; because you are underinsured, you will only receive 50% of f 5,000. This means you can only get a maximum of f 2,500 reimbursed to you.
- It’s also possible to be over-insured. This means the insured amount is higher than the actual replacement costs, and you have been paying too much in premiums.
Fortunately, your insurance advisor is always ready to help you. This way, you can rest assured that you are insured for the correct amount.
We are always here to answer your questions. Make an appointment now with an insurance advisor. We would love to help you.
How can you avoid damage at home due to fire, burglary, storm or flood? In part 2 of this article series we have collected all kinds of useful damage prevention tips for you. With the help of these tips you can prevent a lot of damage. You can read part 2 here.