What is Building Insurance?
House or building insurance is a form of general insurance as you know it, where you insure the value of your house or building with an insurance company against any future disaster that might befall it.
Here you pay monthly or yearly premiums as a token of commitment to the insurance policy which ensures that you get protected or amply compensated in the case of any fire, flooding, burglary, or any similar incidents.
What is my building insured against?
Good question, because your building or house is not insured against all damaging incidents. And that is the more reason you must do due research and ask all relevant questions as well as read the policy agreement very well before paying for the policy and signing the papers.
Ordinarily, your building insurance should protect you against fire, theft and burglary, flooding, car collision, and other unforeseen incidents. But you need to be sure of your coverage because some insurance companies will provide cover against flooding, but not an earthquake; and some will provide for fire and burglary but not for natural disasters like flooding, earthquakes, and tornadoes.
Are the personal property in my house covered in my building insurance policy?
Definitely no. You need personal property insurance to cover you for personal assets within your home. You will need two separate insurance policies to cover you for your building, and for your household property.
You may, however, speak with your insurer to draw up a joint policy that provides cover for both building and household property, but you can be certain that the premium for this will be on the high side. In this case, if a fire incident happens, the insurer will repair and renovate your house and also replace all damaged property within the house.
Will the insurance company replace my damaged property with new ones?
In the case of a fire or flooding disaster, an insurance company is not mandated to replace your damaged property with new ones unless they are completely written off.
The standard practice is to repair the damaged property, or better still give you the payment for new ones after the cost of depreciation has been calculated and deducted.
Unless you enter an agreement to have only new property replaced in the event of any damaging incidents – in which case you pay higher premiums, your best hope is to have the affected property repaired or restored, or get a full pay less depreciation value.
Is it mandatory to have my house insured?
It is not mandatory to have an insurance policy taken out on your residential building, but it might be in your best interest to get it done.
The cost of rebuilding a house might be beyond you years after building your first house, so it is always best to consider taking out a building insurance policy so that you can be protected in the case of any damage that warrants repairing the house, renovating or remodeling it, or even constructing a new one.
I Rented an Apartment and I’m Not the Landlord. Is There Any Need to Insure My Personal Property?
Many people feel they do not need to insure their personal property because they have rented a small apartment and there is no point taking out an insurance policy on small personal assets, but they are dead wrong. In fact, many house renters think it is the responsibility of their landlord to insure the residential building against fire incidents and other unforeseen damage; again, wrong.
It is the responsibility of your landlord to insure his house just as it is your responsibility to insure your rented apartment against insurable risks. Do not forget that most house or building insurance only covers the building against loss, but not the personal property or assets within the house.
So your landlord could suffer loss over his building just as you can suffer loss over your apartment content, the more reason you must think of property insurance.
If you own laptops, tablets, audio players, DVD players, televisions, stereo equipment, surround sound, and other things like costly jewelry, collectibles, decorative items, fine china, DVDs, CDs, clothing, linens, small appliances, furniture, engraved glassware and so on…then you are just as prone as homeowners when it comes to facing a disaster – the more reason you must think of insurance coverage.
It is true that the value of these personal assets may have depreciated over the years, making you think less of insurance, but the cost of replacing them with new ones when damage occurs may be astronomical and you need help from insurers.
Your best bet against property loss to fire incidents, burglary, and flooding disasters among others is to have renters insurance or personal property insurance in place; and you must start by taking an inventory of your personal belongings.
Taking the inventory of your personal property allows you to know every property you own, and their possible value. A complete inventory of all the items you own enables you to take proper stock when you buy new items and add them to an existing property in the house. An inventory is the most valuable document to support your insurance claim. It provides proof of your belongings, and the details required to file a thorough claim.
If your insurance company does not have a complete inventory of your personal property, you may be underinsured, and get less compensation if any damage occurs. So, request an annual insurance review if you carry out any remodeling, upgrade the landscape, add a pool, or finished the basement so that your insurer can update your insurance policy coverage and provide you with adequate insurance coverage and prompt settlement if you happen to file a claim.
