Home insurance
Do I need to take out insurance to protect my home?
There are many people who give little importance to insurance until they have an accident. So the decision to take out an insurance policy depends on each person’s risk tolerance. Our duty as real estate agents is to explain to our clients the importance of taking out a policy to protect their investment.
There are different types of policies; however, in terms of real estate, the most important coverage is aimed at protecting: The internal and/or external structure of the property:
- Personal objects inside the property
- Damage to third parties (accidents within the property)
- Damage to other properties (in the case of condominiums)
How to choose my property insurance?
- There are several types of insurance, and not all homeowners need or seek the same type of coverage. Therefore, it is convenient to specify the coverage of the policy, its restrictions, exclusions to cover its possible risks. The most important elements to take into account when deciding on the type of coverage you need are:
- Use of the property: Investment, rental, vacation or home for primary use
- Civil liability to be insured:
- Protect yourself against legal action and medical expenses
- Protection against damage to other properties:
- Personal objects and the internal part of the property (floor, walls, ceilings, electrical installations, equipment or air conditioning)
- Location:
- If you are in a hurricane-prone area (usually an optional policy)
- If you are in a flood zone (required by government and lenders)
- Type of property:
- House and townhouse: structural protection, flood, accident and hurricanes
- Condominiums: Buildings usually have a general policy (master policy) that covers the structure and common areas against flooding and accidents
- Number of properties: If you own several properties, you have the option of using “umbrella” insurance that allows you to dilute the cost of the policy.
Ways to reduce the cost of the policy?
- Increase your deductible. As a homeowner you can save money by increasing your insurance deductible; that is, the amount that you must pay when an accident occurs, and from which the insurance obligation to cover the outstanding balance begins. This is one of the most common ways to keep the cost of insurance down, and it’s certainly a great way to save, as long as you have the deductible amount available at the time of a claim.
- Install an effective alarm system. Insurance companies give discounts for having an alarm system.
- Try to pay for minor claims on your own, since frequent claims are decisive for insurance companies to set a higher value for the premium. Do not forget to ask for the advice of an insurance broker when purchasing your property and if you have already purchased it, it is never too late to evaluate the conditions, terms and coverage of your policy.
