What is home insurance?
Home insurance is a type of insurance that covers all financial risks that may arise in a person’s home or property. Since no one can predict when a disaster or accident will occur, homes must also be insured.
What are the benefits of home insurance?
Homeowners insurance benefits vary depending on the type of insurance product chosen. In general, the following risks can be borne:
- domestic fire;
- lightning strike causes damage to house;
- risk of explosion;
- plane crash on house;
- smoke from fire causes damage to house;
- natural disasters, e.g floodhurricanes, earthquakes, volcanic eruptions or tsunamis;
- theft or burglary;
- mitigating financial damage from home damage in the event of a disaster;
- Facilitate the production of other things, such as B. Electronic items that need to be replaced in the event of a disaster;
- home values are preserved;
- As one of the conditions if you want to apply loan;
- And many others!
Because the nature of the risks covered is different for each insurance product, read the contents of the insurance policy carefully. In addition, the type of home insurance can also be divided into two, namely fire insurance and Property All Risk.
Also read: 10 Insurance benefits in general and according to Art
1. Fire Insurance
Fire insurance products are usually conformed to the Indonesian Fire Insurance Standard Policy (PSAKI). PPE usually provides protection for 5 basic risks, namely fire, lightning, explosion, plane crash and smoke.
However, some fire insurance products may offer additional protection, e.g. B. for risks of riots, floods and others. If the benefits are not listed in the policy, these risks are not included in the case of protection. For this reason, fire insurance is often referred to as “mentioned dangers“.
2. Property All Risk
Unlike fire insurance, polis Property All Risk included in category “unnamed dangersand focuses more on exceptions. This means that the policy protects the home from all risks unless those risks are specifically listed in the exceptions. Therefore, this one product tends to be more expensive.
B. to exclude risks that are not guaranteed by homeowners insurance Property All Risk This is based on the Financial Services Authority (OJK) namely war, terrorism, nuclear, sabotage and the presence of an element of intent.
Tips & tricks for choosing the best home contents insurance
Before you decide to buy home insurance, there are a few things you need to consider carefully. Especially when you consider that the selection of household insurance products is very diverse. Here are some points to pay special attention to when choosing the best home insurance:
1. Know the types of home insurance
As explained earlier, there are two types of home insurance, namely fire insurance and Property All Risk (PAR). This must be known because of its different nature. Fire insurance focuses more on specific benefits (mentioned dangers), in the interim Property All Risk cover all risks unless expressly stated in an exception (unnamed dangers).
2. Understand the condition of the home
You can see this from the sum insured and/or the amount of indemnity stated in the insurance policy. In the event of a risk, compare the sum insured with the estimated house construction price.
If your house is big, your home insurance needs are bigger. As a result, the sum insured you need is even higher.
Also read: Confused When Choosing Insurance, Here Are 7 Types Of Insurance For You!
3. First get to know insurance products and their advantages
Before contacting the company Insurance, you can check the home insurance company product first. You can find out what kind of product they will offer website or social media her officer. Find out about the benefits, extensions/exclusions and sums insured, e.g. B. Accommodation or temporary living expenses.
4. Read the home insurance policy carefully
if you get insurance policyYou have the right to learn the police. The time to learn this police is also mentioned free time and usually lasts up to 14 days. Within those 14 days you can study the policy further to determine if the benefit and risk exclusions suit your needs. You can also request more details on the process for submitting a claim for the home insurance products offered.
5. Compare to other home insurance companies
You have the right to inquire about more than one home insurance Oh. Create your own list of all home insurance companies in Indonesia. Learn about the home insurance products that each company offers. Then compare the benefits of each of these home insurance policies while you understand the condition of the home. This will help you tailor insurance products to the needs of your home.
6. Choose a trusted home insurance policy
The best home insurance products tend to come from trusted insurance companies. Make sure the insurance company you choose is registered and regulated by the Financial Services Authority (OJK). This affects the legality, credibility and soundness of insurance companies’ finances. That way, your risk of being fooled is even lower.
It would be great to also look for an insurance company that has a reputation for good service, especially when it comes to reporting a claim. Why? Because not all home insurance policies can provide the best home insurance benefits. Also find out about the experience of the insurance company.
Also read: Confused When Choosing Insurance, Here Are 7 Types Of Insurance For You!
7. Adapt to your needs and skills!
First understand what your needs are. Besides, only you know your financial situation. Because premiums have to be paid regularly Oh. Then adjust the size premium fee with your financial means. This way you can feel the benefits of the money you spend on your home protection.
However, you can pay attention to the specified sum insured. Given the most common risks that occur in Indonesia are fires and floods. For the risk of fire, you should choose one that offers compensation according to the price of the house. For flood risk, you can choose compensation of at least 10-15 percent of the total value of the house price.
Also read: 5 risks of not using insurance!
Home insurance premiums
What are the premiums for home insurance? The specified household insurance premium must be based on the provisions of the Financial Services Authority (OJK), which depend on the house construction class. The regulations for the class of house construction referred to are as follows.
- Construction class I: Walls, floors and all load-bearing components and coverings (roofs) are made entirely of non-combustible building materials. Windows and/or doors and their frames, partition walls and floor coverings may be neglected.
- Building class II: The criteria are the same as for building class I, however the roof covering consists of hardwood shingles, walls may contain a maximum of 20 percent combustible material of the wall area and floors and supporting structures may be made of wood.
- Building class III: All buildings other than those mentioned in building class I or II.
How to calculate your home insurance premium
Before you calculate how much home insurance premium you need to pay, you need to make sure whether the home insurance company you choose covers only the building object or includes the contents of the building. Aside from that, rate Home insurance premiums for each business are different. The following premium cost calculation is therefore only an example.
One house unit has an area of 200 m2 and the construction cost is 7 million/m2.
Construction bonus only:
First determine the sum insured
= building area (m2) x construction costs (/m2)
= 200 m2 x 7 million
= IDR 1.4 billion (building value)
– Secondly, determine the costs insurance premium
= Insured amount (UP) x insurance premium rate of company A
= 1.4 billion x 0.2194 percent
= Rp3,071,600
So, the cost of the home insurance premiums with an area of 200m2 from insurance company A is IDR 3,071,600 per year.
Structure and content of premium objects:
First determine the sum insured
= construction value + household goods
= IDR 1.4 billion + 500 million
= 1.9 billion IDR
Second, determine the cost of insurance premiums
= Insured amount (UP) x insurance premium rate of company A
= IDR 1.9 billion x 0.2194 percent
= Rp4,168,600
So, the cost of home insurance premiums with an area of 200m2 from insurance company A is IDR 4,168,600 per year.
To simulate the premium for your own homeowners insurance, you can use the homeowners insurance premium calculator that is also available Oh!
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