Insurance Types
Insurance is an inseparable component of the home buying process. It is compulsory requirement that lenders require at the inception of the home finance application.
Insurance Types
When applying for a home loan. It is important for home buyers to note that part of the application process may include making provisions for Bond Protection, Home Owners Insurance and other insurance types which may be mandatory requirements by banks and other lending institutions to be in place at the conclusion of the home loan approval or granting.
Home Owners Insurance: Covers any destruction or damage that may occur to the interior and/or exterior of your newly acquired home, losses or theft of possessions, and may includes Personal Liability Cover for harm or injuries to others (third-parties).Â
Understanding Home Owners Insurance
Insurance is a compulsory requirement in the home finance application process. Banks and lending institutions require home buyers to have cover in place before the approval home loan application. This includes the following types of insurance Home Owners Insurance: Insurance cover used to protect the bank’s financial interest which results as a direct consequence of the Home Loan Disbursement to acquire of your new family home. It covers against risks that may be as a result of various types of losses, including loss due to theft of possessions or damage to the physical structure of buildings.
Other insurable perils that may also be covered under the same or separate insurance covers include damage due to Fire, Plumbing Faults and Natural Disasters such as (Flooding, Lightening Strikes, Land Slides, Earthquakes) etc.
Home owners insurance is a very important and necessary part of the home loan application process. It may be a compulsory requirement by most banks and lending institutions.
- This type insurance is used to protect the banks financial interest in against the risk to the home loan disbursements made for the acquisition of your new home.
- This is cover against any damage that may affect the physical (interior and exterior) structure of the newly acquired home – it includes loss due to theft of possessions.
- Some of the insurable risks/damage indicated may be as a result of Fire, Flooding, Plumbing and Natural Disasters.
Home building insurance is a compulsory requirement and necessary to take care of any damage to your house, caused by such occurrences as Leaking Pressurized Pipes, Burst Geyser, Acts of Nature, Explosion, Subsidence, and Fire. At times may even provide cover for the cost of calling out services like fire brigade and even arrangement of temporary accommodation after an incident has left the home uninhabitable.
Home contents insurance cover protects the house contents against perils such as Theft, Intentional Damage, as well as damage caused that may result from other elements like Power Surge or a Burst Geyser. It also includes damage caused by Fire, Lightning Storm, Hail and Floods.
Life cover is generally a type of insurance taken on the life of the home owner or person (breadwinner). It’s intended to make provision for one’s dependents in the unfortunate situation of the death of a breadwinner. It helps to ensure that the family continues to afford the lifestyle one has always planned for them even if the breadwinner is no longer around.
It often include family upkeep like buying groceries, paying of children school fees, and continued payment of the home loans monthly installments or settlement where possible and car payments. This type of insurance in essence is designed to ensure that the family’s financial needs continue to be covered.
Estate planning must be considered as an integral part of the home buying process – buying a home is considered as part of the family’s wealth creation process, which is all about asset acquisition and legacy building that will be left behind for the benefit and securing the future of loved ones.
- Legacy on its own is a two fold process; which requires securing one’s legacy against several risk and costs associated with dying (estate costs) in order to secure the future of loves ones.
- Legacy seamlessly involves making provision for a structured manner and means by which an individual’s estate is equitable distributed amongst his/her loved ones in accordance with his/her predetermined desire.
- Protecting an honoring one’s legacy includes taking a Legacy Protection Plan to cover all estate costs and drafting of a Last Testament and Will.
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