House Insurance: Why your home should always be covered

House Insurance: Why your home should always be covered
Photo by Tierra Mallorca / Unsplash

We already know that a house is one of the biggest investment people make.  In fact, not everyone can afford it.  Because of this, it is important to protect it.  We build fences to prevent unwelcome people or animals to get into our space.  We invest in CCTV or expensive alarm systems to make sure we monitor what goes inside our house even when we are not there.  But do we insure it?  Most of us get started with a house insurance coverage when we are still paying our mortgage. But many of us also forget about house insurance after we have fully paid for it.

Property insurance protects your residence against damages caused by fire and lightning as well as natural disasters like earthquakes, storms, volcanic eruptions and flooding. Earth is changing and with it, the climate changes as well.  These changes can be disastrous, resulting in costly damages to property.  In the Philippines, an average of 20 tropical cyclones forms within or enter PAR each year. As per PAGASA, half of this will make landfall.  Severe thunderstorms and heavy rains resulting from these thunderstorms cause flash floods and landslides.  These tropical cyclones create damages to property and in some cases, take lives.

Some argue that living in the city minimizes their risks to the ill-effects of tropical storms.  This is not true, specially when one will look at the magnitude of damage to cars and structures like houses and buildings after Typhoon Ondoy.

Choosing the Right House Insurance Package

There are different types of house insurance packages Filipinos can avail of.  The simplest one covers damages to your house due to fire and lightning.  This type of house insurance indemnifies the home owner when the house sustains damages due to a fire or when lightning strikes.

Another type of house insurance covers damages due to natural disasters like typhoons, flooding, earthquake or volcanic eruptions on top of fire and lightning.  This coverage will indemnify the house owner when there is a damage to the insured property caused by these events.

Some house insurance packages also include medical coverages for accidents in the home that may require hospitalization or medical attention.  This is especially helpful when a fire or natural disaster harms the house dwellers.  It is also a good benefit to add to cover accidents at home that may hurt visitors or guests.

A popular coverage indemnifies the home owner when a burglary or theft happens.  This coverage normally covers expensive house furniture and appliances but may not necessarily cover jewelry and paintings. Other packages provide temporary dwelling to take care of the inconvenience of having the damaged house repaired.  Really, there are many reasons why you should not go without a house insurance but the more crucial ones are listed below:

· Source of funding to repair the house due to an unforeseen, costly event.

· Source of funding to replace expensive appliances and furnishings damaged by fire, flooding or broad water pipes.

· Funding for physical damage to the house for reasons other than fire or natural disasters. This includes freak incidences like when your neighbor’s narra tree falls on your house and damages a portion of it.

· Assistance and funding for damages due to aircrafts

· Replacement of items taken inside the house when a burglary or theft happens.

If you do not own the house you are staying in, you can avail of renters’ insurance. Also called tenants' insurance, it is a type of insurance policy that provides some of the benefits of house insurance, but does not include coverage for the dwelling, or structure.

Cost of House Insurance

House insurance in the Philippines is very affordable.  Typically, it is priced based on the sound value of your property (estimate on how much it will cost if you were to replace the property when damaged). There are many ways to estimate your house’s sound value but the most reliable way to establish this amount is to have your property assessed by a professional assessor.  The fee for such a service is reasonable and you do not necessarily have to do it every year.

Another way to establish the value of your property is to ask a contractor how much he would charge if he were to construct your house today. Once a figure has been established, you can go ahead and secure a quote from an established non-life insurer.  Premiums are typically paid on an annual basis but some non-life insurance companies offer credit card terms in addition to other modes of payment.

Choosing the Right Insurer

Choosing an insurer is like choosing a partner.  This entity will take on a portion, if not all of the risks that you may sustain when any of the covered incidences happen.  Hence, you want to make sure your partner is reliable, can be trusted and most of all, is capable.

One of the ways you can check reliability is to look at the history of the company.  How long has it been around for?  What is it’s track record when paying claims.  This may be tricky to assess so it is recommended that you check reviews.  Surely, there are many commentaries on how the insurer manages their claims. Another way to evaluate the insurer is by checking their website to assess if they have online services in addition to a customer service contact numbers.  An online service makes it possible for you to check the status of your claim without having to make a phone call.

A crucial step in your evaluation is assessing the financial muscle of your chosen insurance company. How are their finances?  Are they making money?  How much of the risks they write are reinsured and how much do they absorb?  All the financial data you will need to complete this part of your assessment is available in the website of the Insurance Commission Just go to the page pertaining to the Performance of Non-Life Insurance Companies so as not to confuse house insurance providers from Life Insurance and the Pre-Need companies.

Finally, on the aspect of trustworthiness.  How do you assess if the company can be trusted?  Beyond the financials, take a look at how they treat their customers. Are they too eager for the business and then become absentee providers until the next premium becomes due?  Or do they make an effort to write you to introduce new innovations, new product offerings or updates on the company? While we hate receiving marketing offers and newsletters, these are actually ways companies attempt customer engagement.  Even if you are not fond of them,  a company that attempts customer engagement is more trustworthy compared to one that pops up only when renewal of your cover comes around.

Need help making a choice? Connect to (02) 8845-1111 or log on to www.standard-insurance.comto search for the branch nearest you.  Help is just around the bend.