home insurance

Understanding Home Insurance

Whether you are a homeowner or a tenant, taking out home insurance can give you peace of mind. However, with so many home insurance policies on the market, it’s important to make sure you understand what they cover, so that you can find a policy that will suit your needs.

Types of Home Insurance

UK home insurance policies fall into two main categories – buildings insurance and contents insurance.

home_insuranceBuildings insurance provides cover for structural damage to your property from fire, storms, vandalism, floods and other events. The circumstances in which your property is covered and the extent of the cover provided will depend on the terms of the policy you take out. If you’re taking out a mortgage, your provider will usually insist that you take out buildings insurance. Structural damage can also be expensive to repair, so taking out buildings insurance is a sensible move for almost all homeowners.

Contents insurance provides cover for the possessions you keep in your home if they get damaged in a fire or flood, for example, or if they are vandalised or stolen. As with buildings insurance, the amount of cover provided and the circumstances in which you can claim vary between different insurers and different policies. Some contents insurance policies also include cover for things like accidental damage to TVs and computers, or lost food in the event of freezer failure. Contents insurance is suitable for people renting a property, as well as for homeowners.

You can buy separate buildings insurance and contents insurance policies from a wide range of providers, but many insurers also offer combined buildings and contents insurance plans. This is another detail that a prospective buyer should look into.

Specialist home insurance policies

Some insurers provide specialist home insurance policies. These include policies specifically designed for people with homes that may be difficult to insure under the terms of standard policies, such as houses with thatched roofs and listed buildings.

How to choose a home insurance policy

It’s important to shop around when you are looking for home insurance packages available in the market and compare the benefits offered by different plans, as well as comparing the costs. Look for a policy that provides all the cover you think you could need, but don’t pay for extra benefits that you’re never going to use.

Once you’ve chosen the most suitable plan for your needs, you may be able to reduce the cost by a range of methods. You may be able to lower your premiums by taking out a voluntary excess, meaning that you agree to pay a set amount of the costs involved when you claim, or by increasing your home security.

When taking out home insurance, it’s also important to assess the value of your home and your possessions accurately – over-insuring your home will mean paying more than you need to, whilst under-insuring it could mean paying out more than you expected to in the event of anything happening to your property or possessions.


Things that you must know about mortgage insurance

Things that you must know about mortgage insurance

There are different types of mortgage insurance available in the market and private mortgage insurance (PMI) is one of the most common types of mortgage insurance that people often complain about. Private mortgage insurance often requires the homeowners pay a heavy premium, but even then it doesn’t provide required coverage that most homeowners look for. In fact, it provides almost no protection to the borrowers.

There is another type of mortgage insurance that pays off only in the event the borrower dies. For this type of mortgage insurance, a borrower usually needs to pay less. Homeowners generally avoid this type of insurance as they can get same sort of and sometimes even better death benefits through a life insurance policy.

Why should you buy mortgage insurance?

A private mortgage insurance (PMI) policy protects the lender instead of the borrower. Still homeowners often need to buy such insurance as the lenders require them to buy. The lenders generally require the borrowers, who make less than 20% of the appraised value of the property as down payment. The less the borrowers put down, the more risks to the lenders. This is the reason why the lenders need the borrowers to buy mortgage insurance and protect them against a mortgage default.

Being a borrower, you don’t get any scope to choose any mortgage insurance provider and also negotiate on the rate of premium. The lender is likely to do this on behalf of you. If you take out a home loan, which surpasses 80 percent loan-to-value, you’re much likely to buy mortgage insurance. The mortgage insurance will pay your lender, should you fail to pay the premiums and your house needs to be foreclosed.

Federal Housing Administration or FHA requires the homebuyers to pay additional charges apart from the upfront premium. The additional fees charged by FHA may include monthly premiums comprising principals, interests and also taxes.

Can you cancel mortgage insurance?

If the value of your home equity increases by at least 20 percent, either by paying off your loan or by appreciation, you can cancel your mortgage insurance. However, you can’t do this unless the lender gets the proof that the position of your home equity is secured and value has been appraised by at least 20 percent. The lender may also require you to pay for independent appraisal. You may not get a voice in selecting the appraiser or the money that the appraisal may cost you.

In case of an FHA mortgage, you need to pay off 78% of the actual sales price of the property, toward the mortgage. Even if the equity value is appraised, then also you need to lessen the actual principal due.

How can you stop paying for PMI?

There are some effective ways through which you may avoid paying for your PMI.

  • Being a veteran, you can opt for taking out a VA home loan that doesn’t require you to buy PMI.
  • Pay at least 20% of the value of the property as down payment.
  • Pay higher rate of interest.
  • Take out a combination home loan of 80 / 10 / 10. It combines 10 percent down payment, 80 percent first home loan and 10 percent second home loan or mortgage.
  • Apply for HomePath home loan provided by Fannie Mae. However, you need to meet some criteria to qualify for such type of mortgage.

When it comes to mortgage insurance, there is no guarantee that you can take for granted. Your mortgage may or may not contain mortgage insurance, should the equity is less than 20 percent as your lender can pay for mortgage insurance even without a verbal or written consent from you.

Author’s bio: Tim Scott is a senior insurance advisor at BestInsLeads.com. He writes for different online insurance journals and portals.


5 Things to Consider When Buying Your First Home

5 Things to Consider When Buying Your First Home

Buying your first house is a step that many of us look forward to for years. That moment when you have the keys in your hand to your own home is considered as one of the best moments in life.

It’s important however that when you are looking for your dream home, and when you’ve found it, you take into account certain factors to ensure your step onto the property ladder is a smooth and successful one.

Location

The first step to finding your new home is to consider the location that you would like to live in; take into account the needs of you and your family and look at the local facilities. One handy tip is to take a trip to the area and have a walk around as this way you will get a feel for the community and what it has to offer; meaning you will really be able to immerse yourself in the life there.

Price

Unless you’re going on a big shopping trip, most of us will decide upon a budget prior to buying anything, and this is vital when looking for a home. Have a look at your finances and work out what you will be able to comfortably afford as by doing this before looking at properties, you won’t get disappointed when you find that 6 bedroom mansion that you adore but just can’t stretch too.

Requirements

List writing might seem like a chore but it will help you immensely in this part of your search as you need to think about the requirements in a home that are most important to you. Don’t limit yourself to things like how many bedrooms you need, instead expand your needs to every possible requirement you can think of. What about the space outdoors? Do you need a garden for the children to play in? Would you prefer something that requires little maintenance?

Look Past the D’cor

When the time comes for you to begin to view possible properties, you should go with an open mind and try to see the potential that is there. This can be difficult if a house is messy and unloved but remember when it’s empty, you can make it your own. You wouldn’t want to say no to your dream home just because the walls in the lounge are striking pink; after all they’ll only need a lick of paint!

Home Insurance

Once you’ve found your dream property and you are on the way to getting the keys, you need to ensure you find comprehensive home insurance. It may seem like just another bill that will go out of your bank account at the end of the month but it could prove invaluable if you ever need to claim on it. To save you time and hassle of searching for the best policy, you could consider going online as there are companies that will do the hard work for you and simply deliver a choice of the best home insurance quotes that meet your needs; so you can just sit back and relax!

In the excitement of buying your first home, you need to try, as best you can, to keep grounded and consider these tips during your search. By taking into account these factors now, you will ensure that you’ll have a long and happy life in your new property.

This post was written by Sally Powell on behalf of Home Insurance Direct; a leading price comparison website providing a range of the most comprehensive home insurance quotes available.


Hints and Tips on Saving Money When Investing in Home Insurance

Hints and Tips on Saving Money When Investing in Home Insurance

Most people would agree that a home is one of the most important purchases an individual will make in his or her lifetime, and for this reason it is essential that the homeowner obtain suitable insurance for the property. Saving money on home insurance is not as difficult as one may think, and the following are some tips on how this can be accomplished.

Reducing Coverage

Many house insurance policies include certain benefits that an individual may find unnecessary. These include free legal advice, or coverage for lost belongings while traveling. It is wise to read through the entire policy to discover which benefits are practical and useful, and which ones could be eliminated. By reducing coverage, one will find that his or her premiums can be significantly lowered.

Paying Annually

Although most insurance companies allow clients to pay their premiums in monthly instalments, there are some agencies that will charge interest for this option. If possible, a homeowner should make arrangements to pay his or her insurance premiums yearly, as this will be less expensive than paying month to month.

Avoid Small Amount Claims

Making numerous claims for small amounts can increase the cost of a person’s home insurance, as his or her provider may view such a client as a high risk and increase the cost of the coverage. This will also result in the homeowner losing any “no-claims” discount associated with his or her policy. While a person is certainly entitled to enter a claim for anything covered under the policy, it is wise to ask oneself if the small claim is worth possible future price increases.

Higher Deductibles

Choosing a policy with a higher deductible is also a quick and easy way to reduce the cost of insurance. Depending on the provider one uses, selecting a higher deductible can result in the homeowner saving as much as 20 per cent on his or her annual premium. While this means the homeowner must pay a higher amount towards repairs in the unfortunate event that a claim is filed, it is still one of the most popular ways of reducing the cost of property insurance.

Security Considerations

If a homeowner protects his or her property with a security alarm, sprinkler system, outdoor lighting or window locks he or she can expect a premium discount of approximately five per cent. It is wise to first call an insurance agency for recommendations before selecting a system. Additionally, smoke detectors are required in certain states, and some carriers will refuse to insure a home in which no smoke alarm is present.

Shop Around

By comparison shopping, one can usually reduce his or her premiums by a considerable amount. Although this may seem like an obvious point, statistics have shown that a high number of consumers obtain only two quotes when shopping for insurance, or simply renew their current policy without comparing its price with that of other providers. Numerous home insurance websites will compare multiple policies for those visiting the site, making the task of comparison shopping easy for anyone.


10 Reasons Insurance is Worth It

10 Reasons Insurance is Worth It

As much as we hate to, paying insurance is one of the necessary evils in life. Yes, it means the insurance companies are filthy rich – especially those with superior legal teams who know every loophole in the book and therefore avoid payouts at all costs, but without them many people would have no safety net. So, while most of us hate parting with our hard earned cash, paying a monthly sum to a broker that may never have to return a single cent in claims, it is still worth it.

1. Health Insurance

The importance of having health insurance greatly depends where you live in the world and what health system your government currently has in place. Those living in America find it hard to get even basic health care without insurance, which to people in a number of other countries is hard to comprehend. In the UK and Australia, where emergency care is free to all there is often little need for health insurance. However, many choose to opt for health insurance to increase surgery wait times or to be able to choose their centre of care. Australia’s Medicare system is one of the best there is, where people sometimes pay a small fee to cover medical costs while the rest is reimbursed. Of course, there are much less people in the country so the system isn’t quite as overpopulated as somewhere like the UK – which was initially not designed to deal with 70 million people, is straining under the weight of an ever-growing population, so many more are choosing private health care. You are then guaranteed speedier wait and surgery times, so if you have a problem that needs attending to in a timely fashion, it is definitely worth the monthly expense. Of course, most people sign up to health insurance for what may happen, few policies cover existing conditions, or do, but a premium. It is especially useful for people who have known familial linked disorders, like cancer, diabetes, heart disease or stroke.

2. Life Insurance

Amongst the various types of insurance policies available, few people opt for insuring their lives, yet death is one of the few certainties in life. The policies pay a set lump sum on death, but can often cover terminal and critical illness too. It is worthwhile for anyone with dependents or those who share a mortgage; in the event of your death at least your bills will be looked after, taking the financial pressure of your loved ones. Always double check the policy terms;  many life insurance policies will not pay out in the case of suicide or accidental death. And be aware of the differences between life insurance and assurance. Insurance policies may run for a certain term and once payments stop you are no longer covered, whereas Life Assurance offers a guaranteed payment on death whether payments were stopped in the past, or not.

3. Dental Insurance

A visit to the dentist is getting more and more expensive as the years go by. Those lucky enough to live in countries where dental treatment is subsidised rarely appreciate they have it so good. While in many countries, trips to the dentist are a big drain on the bank balance, especially if you have children who need orthodontic treatment. To avoid having to forego dental treatment because of lack of funds paying into a dental plan can help when you need it most. Yes, there are financial plans available through most dentists, but only if the minimum spend is a good few thousand dollars. With dental insurance you can generally claim after each trip.

4. Home Insurance

Whether you own your own house or not, having your contents insured against fire, theft and damage is rarely a waste of cash. When precious possessions are at risk people often don’t think too long about handing over money to insure them. Granted, certain things like photographs and family heirlooms are never replaceable, but in the event of fire, flood or damage it’s always good to know that you’ll be able to start again when the insurance money comes through. A stipulation of renting out your home is to have landlords cover, as well as buildings insurance, which is a good thing, so if a tenant wreaks havoc in the property, your payout may cover repair and refurbishment costs.

5. Disaster Insurance

A relatively new kid on the insurance block, disaster insurance helps protect against certain rare, but financially devastating events and has become a hot topic in sight of recent natural catastrophes. Those living in an earthquake zone, bush fire area or region prone to hurricanes and floods may already have some form of insurance through their home insurance policy, but if not it is a wise choice to look into if you can afford the expense.

6. Credit Card Insurance

Sometimes referred to as credit card repayment protection, card insurance offers help with repayments in various circumstances. Should you become ill or unemployed involuntarily the policy will ensure more than the minimum payment is covered on your card, and if you are permanently disabled or die the cover will pay the full amount of your outstanding bill, usually up to a specified amount. This type of insurance is worthwhile if you’re not inclined to pay off your debts every month, and often includes other features, i.e., some plans offer travel insurance, or car rental insurance if you use your credit card to book, so it depends on your lifestyle whether this type of insurance suits. Just check what each credit card offers when you’re comparing them before you settle on one.

7. Travel Insurance

Few people travel these days without travel insurance, either because they’re very well organised, were offered it when booking their trip, or have been badly marred by past experience and don’t want to have to learn the lesson again! There’s no doubt travel insurance is worth it, even for short trips, as so many variables can go wrong. The only trouble you have is to choose the right policy. Online policies are becoming more and more competitive, and depending where in the world you live there are some great deals on offer that cover all eventualities, including winter sports and diving cover.

8. Car Insurance

In most countries car insurance is compulsory; however, it doesn’t mean that everyone pays it. There are always a few chancers on the road who think they can get away without insurance until there’s an accident. And, more often than not, it’s the people who avoid paying their insurance that end up needing it. If an uninsured driver is involved in a crash and it’s their fault, they get landed with the repair and medical bills, so it’s just not worth the risk unless you fancy yourself wearing a prison uniform.

9. Pet Insurance

Tiddles, man’s best friend, or your duck are expensive little creatures to have around. Illness or injury are sure things during their lifetime, and vet’s bills are rarely cheap, so taking out some form insurance is wise to cover costs when things go wrong. Of course, like any policy you may be paying a lot of money and never need to claim, and there are probably many other policies you’d prefer to pay towards if you’re not exactly rolling in it, so it’s not for everyone. But if you’re one of those people who fall in love with every stray on the street or would want do anything possible to keep your pet alive should they contract a terminal illness, then maybe pet insurance is worth it for you.

10. Funeral Insurance

It’s not something people often plan for, after all, most people have no idea when they’re going to die, they only know it will be some day, so paying out a monthly premium for funeral costs seems overly cautious. Yet, the average cost of a funeral is thousands of dollars, and not something we normally save towards. However, there are some people who could still benefit, such as the infirm and elderly. Those who know their time to move on is not far away will be comforted in the fact their funeral costs will be covered when the times comes.

Don’t Forget to Read the Fine Print

Remember, before signing up to any insurance policy think long and hard as to whether you really need the cover. Those who sell insurance depend on the commission from the policies they sell to make a living, which is why they will try their hardest to get you to sign up to their policy, often using as many scare tactics as they can muster to appeal to your sensitive side. Stand strong and only sign an agreement once you read the terms and conditions, including all the tiny fine print – as boring as it is, it’s incredibly important, otherwise you may find when it comes to making a claim you weren’t insured for what you thought. Read, read and triple read before signing anything.


The ins & outs of French holiday home insurance

The ins & outs of French holiday home insurance

Holiday home insurance is not something many people outside the industry would claim to be an expert in. In fact, most people find the complications, clauses, exceptions, conditions and ‘acts of god’ confusing enough when it is all discussed in their first language. Imagine trying to make sense of it all in another country!

Luckily, the British insurance sector is putting up strong competition with French providers in the area of French holiday homes insurance, so you may find it worth your while to simply deal with a local company this side of the channel. Also, with a little patience, a good translator and by not rushing into anything, you should be able to navigate the vagaries of French insurance policies with no serious problems.

French Insurance Companies That Offer Services in English

If you have yet to perfect your mastery of the Gallic tongue, can’t afford a professional translator, or simply prefer to ‘do French’ (excuse the pun) then it should come as a relief that there are plenty of French insurance firms prepared to deal with you and your policy in the English language.

Legal Requirements for Purchasing French Property

Many a French holiday home sale has fallen through at the last hurdle for one simple reason. Unlike in the UK where insurance policies are not required at the point of purchase, French law demands that you have buildings cover, including cover for natural disasters or ‘acts of god’ – BEFORE you sign the final act.

Big Differences between French & English Home Insurance

Third party liability is the cornerstone of French property insurance. This means that basic home insurance may not provide sufficient cover if you intend to rent your holiday home to clients. Always find out if your policy would cover damage or accidents caused to or by a tenant on your property.

You will probably realise early on when talking to French insurers that what you call Insurance is called Assurance in France. Worth noting – and it makes sense really.

Another big difference in the way home insurance works in France is that policies are based on the number and size of rooms in the property. You must be very careful to report this properly, and be even more careful to have your insurance adjusted if you make any changes to the property. A new veranda, the removal of a dividing wall, even the addition of a porch could invalidate your cover.

Renewing your insurance is another aspect that works differently in France. In the UK, your insurance policy will expire if you do not actively renew it each year. In France, the insurer will renew it unless you specifically instruct them not to.

French or English – Some Things are the same!

Of course, whatever country you are in – an insurance policy is an insurance policy. You will need employer’s liability cover, contents insurance and, if you intend to let your holiday home in France, loss of earnings cover. Make sure you understand your home insurance policy down to the small print, particularly with regard to any obligations on you, the owner. Just as in some areas of the UK, you may find that it’s hard to get unoccupied holiday home insurance for contents if the property will be left empty for any length of time – this is certainly a big issue in Paris, France and Bradford, UK!

While you are entitled to optimism, and may feel like your insurance policy costs too much, just remember that if and when something serious goes wrong…

…your insurance policy will be the single most important deal you ever signed.

Raoul Jouk is an independent writer specialising in travel, music, holidays, society and culture. He is currently working to improve awareness of the issues surrounding French property insurance. With a particular emphasis on French holiday homes insurance , he is investigating the dangers and pitfalls of unoccupied holiday home insurance which negatively affect thousands of inexperienced buyers who enter the market unprepared.


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