Home insurance: basic concepts
Taking out home insurance is essential to protect ourselves against incidents that may affect our home, but it is often not easy to understand the policy terminology. We explain some basic concepts you ought to know.
A home insurance policy is a contract by which the policyholder (the person who takes out the policy) pays a premium (amount of money) to the insurance company in exchange for being guaranteed coverage for a risk that is defined in the policy. For this reason, it is important that, when taking out the policy, you study each of the clauses of the contract carefully. We help you to familiarise yourself with the terminology used by the insurer to make the whole process easier.
The building is understood to be all the structural elements of a property, that is to say, the foundations, walls, ceilings, doors, windows, as well as the electrical installation, water and security devices. Basically, all those elements that if we were to turn the house upside down would not fall, as well as any structure attached to it (the garage, the swimming pool…).
You have to bear in mind that each insurance company may have small variations when considering which elements make up the building. Even so, you should be aware that the amount of the building cover does not represent the purchase price or the current market value, but the cost of rebuilding the home.
The contents refer to all those elements or goods found inside the property: furniture, electrical appliances and other electronic devices, as well as clothing, jewellery, works of art and any valuable personal effects. Contents cover can help you recover the cost of replacing your items that have been damaged in various situations, or that you have lost in the event of theft.
Bear in mind that you will need to make a list of all items before taking out insurance, and belongings above specifically stated values will require additional cover. It is also important to remember to let the company know if you want to add any new items you have acquired after signing the policy.
Civil liability cover protects against damage caused to third parties by those legally responsible. In the case of home insurance, it covers the person who has taken out the policy or any member of their family (including pets if they are added to the policy) living in the home, for incidents in the home that may affect another person.
This is an essential type of cover in any home insurance policy. A water leak that causes damage on the floor below, a flowerpot that falls from your balcony onto a car, or the breakage of a neighbour’s window while your children are playing ball, are examples of incidents that would be covered.
Watch out for the small print
Yes, it’s a no-brainer, but we must read the small print of our policy carefully to avoid last-minute surprises. For example, terms such as burglary and theft may seem similar, but while many policies cover damage caused in case of burglary (subtraction of property by use of force or violence), other companies do not insure you in case of theft (theft of property due to negligence), as may be the case if you have left your front door open.
The lack of maintenance of a property or not taking the corresponding precautions if you have a dangerous dog are two more examples of imprudent actions that could be classified as negligence, and which would not be covered by the majority of home insurance policies.
And finally, shop around before you buy. The insurance market offer is very varied thanks to the entry of insurtech and the competition between different companies. Take the time to make a comparative study that will allow you to find the option that best suits your needs and the type of home you want to insure.
If you want to discover fair insurance for your home and for society, check 11Onze Segurs.
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