The need to take out home insurance is a fact. No one is free from having a leak that causes damage to a neighbor, or that we go on vacation and someone can enter our home. Precisely for this reason, we want to clarify the basic elements that affect home insurance, in order to understand the policy well and know what to take out.
Differentiate between Continent and Content
- The building is the fixed parts of the property, i.e.: foundations, structures, walls, roofs, fixed water and electricity installations, as well as fences and attached walls or outbuildings.
- The contents are the assets of the property that, in the event of moving, we could take with us: furniture, household goods, electrical appliances, television, bicycles…
Logically, a different economic value is associated with each one of them. We will see how to calculate them later on.
What is covered by the Civil Liability of my home insurance?
The civil liability guarantee is essential, since it covers the damages that we can cause to a third party (for example, our neighbors) in an involuntary way, due to accidents occurred in the insured property. That is to say, while through building and contents we cover our own property, this guarantee protects us from the indemnities we may have to pay for damages caused to others.
Likewise, the home insurance of our main home usually includes the guarantee of private and family CR, which covers issues that may occur outside the home (damages caused to third parties) by the inhabitants of the insured property.
An example would be if our child, playing in the park, breaks the glass of a store; or if we have a non-dangerous dog, the damage it may cause.
How I value my Continent and my Content
Once we have seen the differences between the two, it is essential to know how we can value them.
- Building: the insurance company will be the one that, depending on the type of house it is (detached or isolated, apartment…) and the region in which it is located, will value economically the building depending logically on the square meters of the home.
What is essential to know is that this value is not similar to what could be the market value at that time, but we always talk about the cost of reconstruction, without taking into account the price of the land. - Contents: just as valuing the building seems to be a function delegated to the insurance company, valuing the contents of our home is up to us, the insured. If a considerable time has passed without reviewing it, it is convenient to make an “inventory” of the goods in our house, especially the elements that may cost more to replace, so as not to stray too far from the figure we give to the company for quoting or renewing our insurance.
Let us remember that the correct valuation of these capitals is very important to avoid problems in the event of a claim since, if we do not do it correctly, we could either overpay the premium or, if we undervalue the building and/or contents, a proportional rule could be applied and we could be compensated below the damage we suffered.
How can I reduce the cost of my home insurance?
The first thing we understand, as an insurance brokerage, is that the priority would be to know that you are well covered. Once we know that, the insurance company will always value positively the fact that the house has good protection against theft, so installing an alarm or a reinforced door would reduce the rate applicable to the theft guarantee.
At the same time, if the loss ratio of your policy is good, you could always ask your insurance broker to apply an additional discount; at the same time, you should be aware that payment in installments (half-yearly, quarterly or monthly) is usually accompanied by surcharges, which you can save if you have the capacity to pay the annual premium.
How do I know I am well covered
It would be convenient to contract our policies with a professional insurance broker who inspires confidence, since this person or this brokerage are professionals in the insurance sector, and day by day they are underwriting policies, managing claims, and they can check which issues can generate problems, which companies are not knowing how to respond well, and correct it so that their clients can be fully satisfied.
On the other hand, if you go directly to a company, a bank or an insurance agent, logically they will sell you the only product they have, which may be good, bad or average.
We hope these tips will help you. If you want this kind of advice and help in your home insurance, we are the solution.
