All homeowners have automatically and immediately considered insuring their homes the moment they receive the keys from the real estate professional (if it is not yet insured before they purchase it). This is a wise not to mention, recommended step because the possibilities of having the home damaged during the move or looted or even be subjected to natural calamities are very likely. Having your residence insured would give you fewer things to worry about should your home be a casualty of vandalism, fire, leakages and even accidental damages.
Now that the importance of residential insurance has been cleared, the next step you have to consider is which type of residential insurance you would benefit the most from?
If your residence is in a condominium or a high-rise building, check if it is a strata property. A strata property is when the owner not only owns their unit but also part of common and shared facilities such as lobbies, hallways, roofs, etc. If this is the case, then you should have residential strata insurance since this is also a requirement by the law. This type of insurance would not only cover your residence but also the common areas and even injuries sustained by people while they are in the common property or using shared facilities.
If you are however planning on renovating a part of your home or adding a new section to it, make sure that these additions are still covered under the insurance. If these additions are not covered, you could get them insured under a separate home insurance policy.
Actual Cash Value
Actual cash value insurance from the name itself is a kind of residential insurance that covers the actual amount of your residence including all the belongings in your home. Although from the sound of it, homeowners might think that this is the appropriate type of home insurance for them but in reality, the cash value that the insurer would receive should something happen to the residence would not be the amount they have paid for the residence and their belongings, it would be lesser because the amount of the home and the belongings depreciated. This type of insurance is still ideal because at least even part of the money spent in purchasing the home and personal property would be returned to the owner.
Replacement cost insurance on the other hand covers the actual value of the residence plus the properties without having to lessen the amount for depreciation. The full price paid for the home and the belongings would be given to the insurer. With this type of insurance, the homeowner would be able to rebuild renovate their home like how it was at the start.
If you are a new homeowner and you are overwhelmed about the type of residential insurance fitting to your home, ask the experts. You could ask the real estate agent who sold you your home or you could do your research since there are numerous insurance companies offering residential insurance.