To determine the cost of securing your house form the perils of fire, theft or any other catastrophic events, use online home insurance calculator. Let’s know the process of using this calculator to secure your dream asset.
Having your dream home secured would be the first thing that you have in your mind soon after you purchased it. Not only it is a big investment, but also it would be necessary to protect the place that is the shelter for the family. A comprehensive home insurance policy adequately covers any loss to the asset and personal belongings.
To know the exact cost of the home insurance and find the right policy to suit your needs and budget, you can use the home insurance calculator. Before we delve into the process of using the insurance calculator, let’s check out the reasons why the cost of home insurance vary.
Reasons for different costs of home insurance
The amount you choose for the coverage amount should be equivalent to the cost of rebuilding your home in case of a complete loss. This amount is not the same as the cost of purchasing your house because of the following reasons
- While buying your home, the amount also included the value of the land, while in case of loss, you still have the land or the structure where you can rebuild your home.
- While calculating your home insurance, it would consider the cost of upgrading your existing home.
- The cost of rebuilding doesn’t include factors like location, or area.
Before starting with your home insurance calculation here are a few parameters you must consider.
Type of Plan
You can choose to insure either the building or its content or both the building and the content. If you opt to insure the building, your assured sum would consider the home structure. In case if you choose to protect its content, the value of your personal belongings would be taken into consideration. A comprehensive insurance policy on the hand covers the loss of building structure as well as personal belongings.
Cost of Rebuilding
This is the cost of reconstruction of the home, which is far less than the market value of the house. Average coverage can adequately cover the cost of rebuilding the home.
The value of the building = built-up area of the property x construction rate per square feet.
Let’s take an example to understand the same-
The built-up area is 1400 sqft, and the cost of construction per sq feet is Rs. 1200 sqft. So the total cost would equal to Rs. 16,80,000, which is also the sum insured.
Value of personal belongings
The cost of personal belongings like jewellery and contents is included while calculating the coverage amount for home insurance.
Steps to calculate Home Insurance Premium
After getting the amount for home insurance coverage on can compute the insurance cost with the help of the home insurance calculator.
The premium depends on these factors:
- Your home type- rented or owned.
- The assured sum
- The value of the personal belongings
- Add-on covers like terrorism cover
So just insuring your home isn’t sufficient as you would need to ensure that the entire house is sufficiently covered so that it doesn’t burn a hole in your pocket in case something unexpected happens.
