Your home is one of the most valuable assets that you have. And as a homeowner, if you want to protect it and keep it safe from anything that may harm it, you may have already wondered about property insurance. Read on as Assurance.Ph outlines what homeowner’s insurance is and some of the important reasons why you should consider getting it.
What is Residential Coverage?
Residential coverage is a type of property insurance that covers losses and damages that may occur specifically to your home or residence, as well as the damages and losses to the furnishings and other assets that are in it.
Furthermore, your residential coverage also provides liability coverage for accidents that may occur in your home or on your property (where your home is located).
It’s important to note that the amount of coverage that you may apply for will be estimated based on the cost to repair or rebuild your home. It will not be based on the fair market value of your home.
Why Do I Need Homeowner’s Insurance or Residential Coverage?
Residential coverage can help with future repair or rebuilding costs for your home as a result of damages caused by a wide variety of risks or dangers (called “perils,” in the insurance industry). Here in the Philippines, these types of risks or dangers may include, but are not limited to:
- Damages from theft (especially damages left during breaking and entering incidents)
- Fire and smoke damages
- Harm and damages from high winds and those brought on by typhoons
- Falling objects, nearby trees, and branches
- Water damage from plumbing, appliances, and heating or cooling systems
Another equally important reason for getting residential coverage is that it’s a requirement that many banks or mortgage lenders require from prospective homeowners. So if you’re shopping for a home, be sure to add home insurance costs to your list.
What Does Residential Coverage Offer?
Residential cover or homeowner’s insurance helps protect your home or private residence by providing financial protection against property damage, personal liability, and against natural disasters.
These dangers are called “perils,” an insurance industry legalese term that refers to the incidents or causes that damage your home, your possessions within, and may injure or hurt the persons who are within your home at the time. These perils are defined in the industry by the range of damage and loss that they cause, and are divided into three categories:
- Basic or Named Perils. Basic perils are the most exclusive, meaning, the damage they cause is very specific and your coverage has to be clearly defined to cover for them. Basic perils include (but are not limited to):
- - Fire, and lightning, and subsequent damages from smoke
- - Extended coverage (vehicle impact, smoke, falling Aircraft, explosion)
- - Explosions, vandalism, and civil disturbances
- Financial coverage for basic perils is almost always for the majority or total loss of your home or residential property.
- Broad Perils. The second type is more inclusive. While this type still covers the basic perils, it widens the scope by including other perils, like:
- - Damages resulting from burglaries and break-ins (both loss of property and damages to your private residence resulting from damages and vandalized property)
- - Falling objects (tree branches, physical debris tossed about during a storm, plane and vehicular crashes, and others)
- - Accidental water damage, and similar perils
- But remember to check your residential cover policy to make sure that the specific peril and loss are listed, or else you may not be paid if such peril does happen to your home and it is not clearly stated in your policy.
- All Risk or Open Perils. The most inclusive of the peril types, this covers just about everything that may damage your home or residential property. It covers damages caused by natural disasters like typhoons, floods, earthquakes, and volcanic eruptions, But beware: while “All Risk” perils may be wide-ranging and seem advantageous to homeowners like you, it’s best to be sure what exclusions or restrictions are included in your policy---and ask your agent what open perils may be covered in your homeowner’s policy. Remember there are always exclusions to every type of insurance policy out there.
Now that you know what the perils (the risks and dangers) are to your private residence, here are some of the residential coverages that are in your home insurance policy that covers these perils:
- Basic Residential Property Coverage. This coverage addresses your home’s physical structure itself, as well as any and all attached structures such as your garage, patio, or backyard deck, among others. Basic residential property coverage helps provide financial cover for the repairs that would be needed. Note that the coverage amount may be based on the cost estimate to repair or rebuild your home. It will not be based on the fair market value of your home unless this is the Sum Insured that you will be declaring on your policy (and paying premiums for). This coverage is one of the three foundations of your homeowner’s policy.
- Personal Property Coverage. This coverage helps pay to replace belongings and properties within your home or private residence. They may include your furniture, appliances, and electronics, and others, which were damaged or stolen. Note that this may or may not cover fixtures so it is best to ask an insurance provider, like Assurance.Ph. This coverage is the second of the three basic coverages in your home insurance policy.
- Guest Liability and Medical Coverage. If a visitor (or any person who is welcomed but is not a regular resident of your home) is accidentally injured in your home, this coverage will cover the resulting medical expenses and protects you from any liability provided that the cause of the injury is accidental. This is the third of the basic coverages to have in your policy.
- Detached Structures Coverage. This coverage will cover the cost of repairs or replacement for any and all detached structures on your property, like your fence or perimeter wall damaged by any one of the perils you are covered for. While not one of the key coverages, it is just as necessary to have in your policy.
- Other policy add-ons or additional coverages. Home insurance agencies and providers like Assurance.Ph offers a wide variety of add-ons to suit the needs of homeowners like you. Add-on coverage may provide more cover for, say your vehicles, in addition to your Personal Property Coverage. You can add coverage like fire insurance, flood insurance, and more.
On the flip side, most homeowner’s insurance policies are restricted in terms of the daily use of your home and the wear and tear that go with it. The most common exclusions covered by Residential Cover include, but are not limited to:
- General wear-and-tear in the course of the use and maintenance of your home
- Mechanical or electrical breakdown
- Faulty workmanship (carpentry, electrical, plumbing and piping, HVAC, among others) - this should be covered by your contractor during the duration of contract works
- Any damages and repairs over the maximum amount limit of your residential coverage policy
- Restricted coverage for damages when:
- - Your home is presently unoccupied for more than 30 days (as opposed to you currently living in it)
- - Your home is being rented out to other people. This should be disclosed to your insurance provider.
How Do I Get Residential Cover?
Most Filipino homeowners may get residential cover because it is required when applying for a housing or mortgage loan.
That said, there are two ways you can get your residential cover:
- Through your insurance agent (most life insurance agents also carry non-life insurance products like residential and home insurance), or by going directly to an insurance provider’s office.
- Go online and visit an insurance provider’s website to request a quotation and apply for a homeowner’s insurance policy online. Once your application goes through you can also pay your premiums online and get a digital copy of your policy via email. Assurance.Ph offers both walk-in and digital applications for homeowner’s insurance.
What Are the Requirements for Getting Residential Cover?
Now, the requirements would depend on a lot of things; on whether you’re applying for a mortgage loan or not, where the residential property you’re looking to buy is located, among other things.
Don’t worry, your Assurance insurance advisor will be able to help you with that information and help walk you through them.
How Much Would My Residential Cover Insurance Cost?
The price of your homeowner’s insurance policy will depend greatly on your location, the coverages that you want, and the insurance amount.
Note that your policy can be valued based on the Fair Market Value or the construction cost to repair or replace your home. There are ready resources that can help you assess the value of your home depending on the construction type and size of the property. But to best assess your property value, please contact a real estate appraiser.
Providing the Home That Shelters You the Protection It Deserves
As the saying goes, your home is your castle---it’s your safe haven, your shelter against the elements and dangers of the outside world, and your comfort zone where you can rest and relax with your family. What they don’t say is that your castle needs protection, too. Not just any protection; the right residential coverage.
Assurance.Ph is your partner in providing protection for your vehicle and property in the Philippines. We provide information and advice to help clients pick and purchase the protection plan that suits their needs and budgets. Start a chat or call with one of your Assurance.Ph advisors today at 0915 705 2031, 0905 205 0402, or 0956 302 9631, or email us at email@example.com to know more about our vehicle insurance prices and packages.