Congratulations! You have made one of the biggest investments in your life by buying a home. However, without bursting your bubble, let me remind you that great as that may be, some expenses come with buying a home. One of such vital expenses is homeowners insurance. Can I do without home insurance in Ghana? As with most insurance packages, you may be tempted to question whether it is relevant, particularly when you have already spent so much to acquire it. Of course, not having home insurance would not stop you from living inside your property, particularly if you have fully paid for the home. However, if you have had to acquire a mortgage or take a loan facility to pay for the loan, then most of these institutions would insist that you take a form of home insurance. This is to protect their investment so that they do not lose out on damage or loss.
Homeowners insurance is a type of property insurance that insures you against losses and damages to your property, including furnishings and other assets in the home. Homeowners' insurance also provides liability coverage against accidents in the home or on the property.
The home is probably the most valuable possession of most people. It is for this reason that, having spent so much to acquire your home, you must go the extra mile to safeguard your investment by ensuring any damage or loss arising from fire, flooding, strong wind, theft, etc. Give yourself that peace of mind knowing that you and your family are covered when the unexpected happens.
Well-structured homeowner insurance indemnifies you from expensive lawsuits arising from third-party injuries that may occur on your property. The medical bills and other incidental costs of replacement for any damages could be quite expensive; hence, the homeowner insurance gives you that coverage.
To protect mortgage lenders from missing their financial investment in your property, they may require you to take homeowners insurance that protects their interest and ensure that they can secure part of their investment if not all of it when there is unexpected damage or loss.
There is no strict requirement in Ghana, which mandates individual homeowners to take insurance, however, section 183 and 184 of the Insurance Act, 2006 (Act 724) makes the insurance of commercial buildings – both completed and under construction compulsory. Individual homeowners insurance may be part of the requirement of your mortgage lender or home loan provider. They request this to protect whatever investments they may give you. Having said that, even if your home mortgage is paid off or you paid fully for it upfront, home insurance coverage is a good idea.
While we have shown how important it is to have property insurance in Ghana, some tips can help you to get the best out of your homeowner's insurance and save you some money in the end without sacrificing the benefit of your policy.
Rather than have insurance policies with different providers, take advantage of the different policies being offered by your homeowners’ insurance providers to negotiate a reduction in your premium payment. Most providers are likely to offer to bundle an automobile and homeowners insurance at a discounted rate to entice you. This is because getting to sell you more of their products is always better than selling you less of their policies. Take advantage of this and beat down the cost of the coverage.
As a tip when bundling, do your research to understand the usual cost of the individual coverages included, do not just assume any bundle offered is a good deal. Secondly, take exactly what you need in your policy and negotiate for more discounts. It is always worth trying to see if they can do a little
Tied to the point above on pushing for more discounts is this tip, “Don’t leave discounts on the table” Most insurance companies offer different discounts so it may be necessary for you to get to know all the offer discounts to find out which of them you can use. Some insurers may offer discounts if you already have some home safety equipment like smoke detectors, stronger bolt locks or even if you are a non-smoker. Other companies may also offer discounts based on your professional or business association, employer, retiree discounts or loyalty discounts so it is important for you to find out all the possible discounts on offer and make use of those that you qualify for.
For every claim that you file, it is expected that a portion of it be paid out of pocket. The part that you pay out of pocket when you file a claim is called a deductible. Generally, paying a small deductible usually means a higher premium or monthly payment so to avoid paying high monthly payments consider raising the amount of deductibles. This may save you a lot of money if you do not end up needing to file a claim for a while.
While this option may save you a lot in high premium payments, it is important to make sure you use the savings that you get as an investment so that in the event of a disaster you have funds available to get you back on your feet.
Another way of reducing your premium payment is by taking time to reduce the risk associated with your home. As with any insurance, the greater the risk factor for the insurance company, the higher your premium will be. This may require making an upfront initial investment to fix some known risk issues. You may want to look at how you can make your home more secure by looking at things such as enhanced security systems, roof repairs, plumbing works and others that would make your home more secure. These investments would also improve the resale value of the property when it becomes necessary. Some insurance companies may lower your premium if your risk is reduced. Check with your insurance company to know how much discount they offer if you do those upgrades.
Another important factor influencing the cost of a premium for your homeowner insurance is the proximity to essential services such as fire departments or police stations. The risk associated with a property close to any of this is significantly lowered, meaning you can negotiate for a lower premium compared to someone who is not close to any such facility. Living in an earthquake-prone zone also raises your risk profile and so you need to be mindful about how much you may have to pay for home insurance if you are choosing a property close to or within an earthquake or flood-prone zone. As much as is practicable, stay off such zones to give you more bargaining power on your homeowner insurance.
To be sure you are getting the best price for the coverage you want, check out many more insurance companies to make sure you choose the one that gives you the best offer at the least cost. Cost is a factor when buying homeowners insurance but do not go low on service quality and reliability. You may gain a few more savings if you take time to speak to a lot more companies on the policy you are looking for.
Some insurance companies may raise your premium based on the frequency of claims that you make. The more claims you make suggest that you are high risky investment, and for that matter, the insurance company would have to vary its premium. Do not let the small claims add to the frequency with which you make claims. Deal with the issue if it would not break you. An increase in the cost of premiums after a claim varies depending on the company and the cost of the claim. This is why it is important to talk to each agent when you are getting a quote to find out how much your premium may go up if you file a claim.
In conclusion, getting insurance for your home may not be the most exciting news in the world for any homeowner, but it is certainly one of the most important things that you need to keep your mind at ease in the event of any eventualities. Take time and go through the tips we have given and find the ideal coverage for you at the most affordable price. Not being covered by insurance in the event of a flood, theft or fire is not a situation you want to find yourself in.