Your home is probably the most expensive asset you own, but it’s also so much more than that. This is why you need to take all the possible precautions in ensuring nothing will happen to it. One of the most important things you can do to ensure yourself a peace of mind is to choose a home insurance policy that will protect your family’s future.

Before you make this decision, you need to make sure you understand what kind of insurance your home needs and what are the long-term consequences of your choice.

What is it?

Homeowner’s insurance policy is designed to mitigate the risk of loss, which might happen due to fires, theft or heavy storms. Most policies don’t cover the damage done by earthquakes and floods. Like with most other insurances, the homeowner pays a fixed amount each month and receives a claim in case their home is damaged or something gets stolen.

The size of premiums depends on the value of your property and the chance of it being damaged, which is mostly about location.


Market value

This term will be used a lot when you try to find the insurance company for your home and it isn’t always as clear as it might seem. This is the worth of your home on the market, meaning how much money you would get if you sell it at the time you’re signing the contract.

However, this is just an estimate and that could be troubling for two reasons. First of all, you might not be able to get that price on the market and second of all the cost of rebuilding are often much higher than buying a property.


What to look for in an insurance company?

As with any other long-term contract, it’s hard to decide on a company because there are a lot of factors involved, some of which you can’t predict. One of the first concerns everyone has is obviously the monthly payment they need to make; however, this is hardly the most important factor.

When you’re asking around about your insurance company, make sure you find out how long it takes for the claim process to be completed. This is how long you will have to wait in order to get the money and start rebuilding your home.


Shopping around

Have in mind that home insurance is a service and therefore its cost is based on the insurance market. That makes the competitors fight for every client and try to provide new and useful additions to their insurance policies all the time.

 Shopping around for the right policy will be worth your while especially when you consider all the nuances of this deal. Some studies show that as much as a quarter of all buyers shop for their insurance online. This is especially true for younger buyers that are just purchasing their first home. In markets where there are only a few larger insurance companies, smaller providers can increase their share of the market by turning to digital services. New Zealanders seem to be huge fans of this trend and services like Youi NZ online insurance allow them to shop and compare prices from the comfort of their homes.


Reduce the cost

There are a few ways to cut down your premiums and some of them might significantly affect your bottom line. The insurance is basically based on the risk that something may happen to your home. By lowering this risk, you’re also lowering your premiums.

This can be done by installing a good security alarm that will cover all the potential threats in your neighborhood. It’s something you’re going to need to invest in, but it’s a one-time investment, while the premiums need to be paid every month.


Future construction

Any future construction that you plan to make on your home will change the insurance cost and the monthly payment. Have this in mind before you start any work. Ask your insurance company about the materials and the construction projects that would be the easiest to insure in the future.

Construction projects that use a lot of wood and other flammable materials will probably increase your premiums, but so will the materials that significantly raise the value of the home.


Choosing a home insurance provider is one of the most important decisions a homeowner needs to make. It’s important to shop around for the right company and to think ahead when it comes to future projects.


Published by Emma Lawson