Most of us will buy a house at some point in our lives. It is a dream for many and also the single largest investment that we make in our lives. Having spent so much it is wise to have it safeguarded too, isn’t it. I was speaking to an insurance agent the other day to have my house covered. There is so much to do with housing insurance that many of us might not know or may have ignored. Here is what I gathered from the discussion.

If you have bought a new house on mortgage you do not have a choice but to insure your house because the lender will insist so. Homeowner insurance policies usually cover house structure, personal belongings, additional living expenses, liability protection and medical payments. The premium rates differ depending on what you want to be covered. These are some of the important aspects of home owner insurance.

1.   A housing structure cover will protect your house from damage due to fire, theft, ice and snow, while the personal belongings cover will offer protection for the valuables in your house. What you should remember here is that damage due to floods and earthquakes is not covered in housing policies.
2.   If there is a large repair job required in your house which requires you to move out of the house for a while, the additional living expenses incurred, will be covered.
3.   Assuming that a tree in garden of your house fell due to a storm last night and damaged the neighbor’s compound wall, then the liability protection cover will help compensate your neighbor for the damage caused. It will also pay for the cost of defending you in court in case of a law suit.
4.   If there is a medical expense incurred by your neighbor as a result of this accident, then the insurance company will also compensate for the expenses. What you should note here is however is that, you and your family members will not be covered in this.

We have seen what the insurance company does for a homeowner’s policy. Here is what you should do. You have to make a list of all the valuables in your house and along with their value. This will be required even while you apply for an insurance cover. Valuables may include things like your expensive jewelery, TV, PC, laptop, sofa, cot and so on. If you can shoot pictures of these, still better, as it will make your claim process much easier. Do not think that you are smart by under-estimating the value of your goods so that you can pay a lower premium. When there is a claim, you will be the loser. Also remember to keep updating the list as you add stuff in your house like blogger fivecentnickel suggests here. Having done all this, make 2-3 copies of the list and photographs and store them in any safe place outside your house.

There is however a flipside to all this. The insurance agents for homeowner’s policy are known to be extremely picky when selling a policy or fixing the premium rate. You will be asked to fix even the smallest nut and bolt in your house before getting the policy because when there is a claim the outgo is really huge from the insurer. So be prepared to repaint your house, install fire alarms, fix a leaky pipe or repair the garage shutter. After all it is for your good.

Think of it as a protective measure to safeguard your house which is the abode of your fond memories and dreams.