Everyone knows what insurance is, but not everyone knows the specifics of how it works, what it does, what the different types are and why they need it. Here we’ll be talking about home owner insurance and how to know which one is the best option for you.
What are the Different Types of Policies?
Insurance — whether it’s for your house, your car, or yourself — exists to protect you financially if things go wrong. A motorcyclist hit your car? A flood left your home water-damaged? That’s where insurance comes in. In Malaysia and most other countries, there are usually three types of policies for properties. There’s the basic fire policy, houseowners policy and householders policy.
The basic fire policy is pretty much as the name suggests. Basically, it protects your property against damage or loss that’s caused by fire, lightning and/or explosions (from domestic usage of gas).
Houseowners policy offers more protection in comparison to the basic fire policy, because it also covers damages caused by floods, burst pipes, theft, road vehicles, animals and, in some cases, it even covers floods and earthquakes. Although, there are instances, where those are under separate packages altogether. It is entirely dependent on the insurance company you will choose.
Householders policy is unique in that it doesn’t cover the property at all but rather the contents within — this includes you, the insured, in the case of fatal injury.
How Much Do I Have to Pay?
The amount of premium you pay will vary depending on how well-protected the policy leaves your house. Of course you want the most affordable option, but getting insurance for your home isn’t really something to be thrifty about. After all, you are paying for protection. If a drunk driver crashes into your expensive auto-gate, you don’t want to pay for that yourself, especially when it’s not your fault. And a cheaper package might not offer coverage that would really help you out in these kind of situations.
Make sure you understand the terms and conditions of your insurance package. Is your home going to be insured at all times, say, even when it’s being renovated? The common recommendation is to purchase both the houseowner and householder policies for the best coverage.
Take Into Consideration – Strata Titles and Financed Property
There are two things that require special attention in terms of home insurance and that is if 1) you own a strata titled property and/or 2) your home receives financing.
1) Say you live in an apartment building; ideally that means that your unit is under a strata title. If that’s the case, the managing company of your complex is the one who has to take out the insurance under a master policy. You should insist on a copy of your individual certificate of insurance so that you can see for yourself exactly what is covered under the master policy.
2) If you received financing for your strata-titled home from a body that is not under the watch of Bank Negara Malaysia (BNM) then you may be obligated by that body to buy a separate houseowner policy in addition to the one already purchased by your building’s managing company. That’s pretty redundant, right? So be sure to go with a financial institution that will not impose this unnecessary extra insurance.
Lightning Struck My House — What Do I Do?
Bummer. If that happened while your home was insured under (at least) a basic fire policy then good news — you can make a claim to the insurance company! Of course, this applies to any other damages covered under your chosen policy. Try to submit the claim as soon as possible after the loss or damage occurs and include the necessary supporting documents. The insurance company will assign someone to investigate the claim so make sure you cooperate with them.
Now you know the basics of home insurance! As with anything finance-related though, you should always do further research so you get the best deal. If you want to read more informational articles like this, head over to NuProp or follow our Facebook page to get constant updates.