Finance Guru | Enjoy Peace Of Mind With 3 Money-Clever Strategies For Buying Home Insurance

Home insurance typically covers costs related to any damage to your home in the unlikely event of a burglary or natural calamity –– helping you enjoy peace of mind in case something goes awry. This commentary is designed to help you with some money-clever strategies, so that you choose what's best for your personal situation.

Establish The BAL Level Of Your Local Region For The Right Cover

Australia is well known for its bushfires during hot summers, but many homeowners overlook this aspect when taking out home insurance. This essentially means that their home isn't covered in a situation where a bushfire damages their home. A recent report revealed that bushfire numbers increased by 40 percent per week in Australia between 2008 and 2013, while another report revealed that 50,000 bushfires occur in the country every year –– indicating the sheer intensity of the problem for homeowners. Make sure you check your Bushfire Attack Level (BAL) before taking out home insurance. If you fall in a high-risk area (even if you've never even seen a bushfire), make sure your home insurance covers this event to help with enough finances for rebuilding damaged parts of your home.

Plan The Excess You're Willing To Shell Out Of Your Own Pocket

Many home insurance policies have varying levels of excess, which is essentially the first amount you're required to pay before home insurance takes care of the rest of the claim. Insurers have varying levels of excesses to suit the needs and risk appetites of different homeowners. For instance, assume you've taken out a home insurance policy with an excess of $1,000. You will need to pay the first $1,000, while your insurance company will cover the rest of the damages you're claiming from them up to your maximum claim limit. You need to plan this excess carefully because you'll need to shell it out from your own pocket in the event of a claim.

Check For Any Exclusions To Avoid Paying Out Of Pocket Later

Different home insurance policies typically come with different terms and conditions. Too many homeowners forget to read the inclusions and exclusions, only to be denied their claims at a later date. For example, some home insurers stipulate conditions where claims are not paid out if your home is vacant for extended periods or if you don't secure your home based on their recommendations. These exclusions mean that your home insurance claim will not be paid out to you. Be sure to look at the fine print to find out what you are covered for before signing on the dotted line.

If you want peace of mind, be sure to consider these factors when planning home insurance. An insurance broker can help you decide the best home policy based on your personal situation.