Finance

Are Home Insurance Policies Mandatory by Law?

When you look into the various types of insurance policies that are sold in the country, you will find there are always some rules, regulations, or guidelines attached to them. These guidelines are designed based on the protection and coverage needs of all parties and things involved. For example, it is mandatory to have a car insurance policy to drive, because a car is an important possession that is not easily replaced. By this logic, your home is the most valuable possession you have. Hence, you might wonder, is a home insurance policy mandatory?

The short and definite answer to this question is ‘no’. You have no legal obligation to purchase a house insurance policy, but it is advisable to protect your property from any loss or damage from fire, flood, theft, storms and other natural disasters. Also, if you take out a loan to buy your property, your lender may ask you to insure the property, such as your house or any other property. Here are some reasons you should buy a home insurance policy:

  • Lowers risk

If you own a house or property, it is up to you whether or not to protect it with a home insurance policy. You can take the risk of not buying a policy because you think that you do not need to protect your home. You might be lucky that nothing happens to your house. But luck eventually runs out. If anything happens to your house, the cost of rebuilding or repairing is yours. When you fix them remember that minor damage such as blown roof tiles or broken windows are expensive. This added to the basic repairs of the house can be a deathblow to your finances. So, not buying a home insurance policy can be much more expensive than buying the policy itself.*

  • Avoids being underinsured

It is not enough to just buy a home insurance policy. It is also important to buy the right coverage for the right amount of money. Here’s where a home insurance calculator comes into the picture. When calculating a home insurance quote, the insurance provider will consider several factors. One of these factors is to understand the cost of remodelling your home. As a property owner, you may be tempted to declare a significantly lower reconstruction cost to save money. However, these small savings will cost you a lot in the future, so understand this as less insurance for your assets can have huge financial consequences. When you are looking for home insurance quotes for a home insurance policy, it is a good idea to ask about the exact cost of renovating your home. You must remember that the cost of rebuilding will change over time.*

  • Coverage for the contents of the house

When thinking about home insurance, most people usually think about construction coverage. However, home insurance policies also provide coverage for household items. Your home has a variety of valuables, from electronic devices to your jewellery or expensive showpieces. However, it is up to you whether you want to cover them in your home insurance. If you can afford the extra coverage, you should go for it.*

* Standard T&C Apply

Also, a home insurance policy can be considered a luxury if you do not need it and it is definitely a must if you have one. So, it is up to you whether you want to buy a home insurance policy or not. Let’s understand it this way, isn’t it easy for you to get a good night’s sleep when you insure your home? Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

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