Disasters can happen to anyone, anytime, anywhere. Therefore, preparation is needed as early as possible to protect you from financial losses.
The sooner you prepare for this, the more ready you are if a disaster suddenly occurs. One of the preparations that you can have is home insurance.
Home insurance is insurance whereas a policy owner, you have the right to get insurance money for the risks that occur in your home.
Instead, you must pay insurance premiums.
Depending on the type of insurance, there are several insurances that provide protection not only for buildings but also for building contents. Own home insurance can also be divided into home insurance and home or business home insurance.
(1.) Home Insurance
Residential insurance is divided into 2 types, and for each type, you can choose insurance with a basic guarantee or a guarantee of expansion.Each of these insurance has a different premium. The greater the sum assured, the greater the premium you have to pay. Here are 2 types of home insurance in Indonesia:
# 1 Fire Home Insurance
As the name implies, home fire insurance is home insurance that provides protection against fire risk. Some of the risks included in home fire insurance are:- Fire due to accident, spreading fire, short-circuiting
- The fire caused by lightning
- Fire due to an explosion
- Smoke damage
This insurance not only guarantees the building of the house, but also the property inside the house. Of course, the protection provided must be adjusted to the initial agreement.
# 2 All Risk Home Insurance
Unlike home fire insurance, all risk home insurance provides the insured with complete protection.Some of the risks borne by all risk home insurance are:
- Crime: This includes theft, damage caused by bad deeds, forced demolition or violence
- Guarantee of property damage carried out by third parties. The third party here is a non-family member
- Damage to a house due to being hit by a vehicle (vehicle not privately owned)
- Home damage due to natural disasters
All risk home insurance provides additional protection such as firefighting costs if the house experiences a fire, the cost of rental housing during the repairs, the cost of cleaning debris, and professional fees such as the cost of architects, surveyors, consultants and building management.
Not only provides protection for property, all risk home insurance also provides protection for policyholders or the insured.
All risk type home insurance also provides protection for personal accidents due to fire and/or accidents anywhere, anytime and any consequences.
The protection obtained by the insured is medical expenses as a substitute for medical expenses, as well as compensation for death or overall permanent disability.
(2.) How Does Home Insurance Work ?
Below is one example of how home insurance works.
Example:
Building area: 200 square meters
Re-construction costs: IDR 4 million per square meter
Registered assets: IDR 200 million
From the information above, the sum insured can be calculated by adding up the costs of rebuilding and the price of the assets listed.
So, the sum insured = IDR 200 million + (IDR 4 million x 200 square meters) = IDR 1 billion
After knowing the insurance value, you can calculate the premium to be paid by knowing the ratio of insurance premiums (this ratio is adjusted to the policies of each company).
Example:
Insurance premium ratio: 0.15%
So, insurance premiums = 0.15% x Rp1 billion = Rp1.5 million per year
(3.) Home Office Insurance (Business Property)
The building covered in this insurance is different from residential insurance.
In this insurance, only property related to business can be included, for example, offices, warehouses, factories, shops, shops or so on.
For the industrial property as mentioned above, generally all-risk industrial insurance uses, while for non-industrial property such as offices, hospitals and schools use all risk property insurance.
As the name implies, the two insurers protect property objects as a whole.
Some risks that are protected are:
- Riots, riots, strikes.
- Damage due to natural disasters such as earthquakes, tsunamis, volcanic eruptions, floods, hurricanes, landslides, and storms.
- The crime that causes damage.
Policyholders also have the option of expanding protection not only in their business buildings but also for items in them such as machinery, company inventory and more.
(4.) Premium amount for home insurance
As mentioned above, the premium for home insurance depends on the amount of sum assured. The greater the sum insured promised, the greater the premium that must be paid.
In addition, the premium amount also depends on the level of risk, the higher the risk that is protected, the higher the number of premiums to be paid.
This high risk can be seen from business lines, for example, match stores which have a higher risk of damage than fabric factories.
The third determinant of the height of the premium is the quality of the building, which is divided into 3 classes, namely:
Class 1: Buildings that have fire resistance properties
Class 2: Buildings that are relatively fire resistant
Class 3: Buildings that are vulnerable to fire
Buildings that have class 1 quality, will have lower premiums than other classes, and the most expensive are class 3 buildings.
Understand the Type, Maximize the Benefits
If you decide to buy the property or home insurance, the first thing you have to do is choose which insurance you need.
Next, choose coverage according to your abilities. After you buy the insurance, understand the policy correctly.
Know what restrictions and conditions for making insurance claims. In this way, you can maximize the protection provided by your chosen insurance product.
Do not forget the proverb "available umbrella before the rain", the earlier you make preparations, the smaller the loss that you will feel.
Have you ever known one of the home insurance above? Have you had home insurance to provide financial protection?
Give your answers and experience in the comments column below and share this article so that it can be more useful.
0 Comments