Owning a home is a big responsibility and financial expense. However, is it necessary to maintain home insurance? This issue is of great interest and even more so today when the housing market is recovering and growing compared to previous years.
Home insurance is contracted when it is desired to cover any unforeseen event that arises inside or outside a person’s home. But is it mandatory? Why take out this type of insurance? For a simple reason. Home insurance can protect the assets in the house, the personal objects of its inhabitants, and the other damages that can be caused to third parties in the event of any unforeseen event.
Until a few months ago, there was no real obligation for anyone with homes in their possession to take out home insurance, except, for example, when the house was mortgaged. As shown in article 10 of Royal Decree 716/2009, in the US, it is obliged that those assets within the mortgage guarantee must have insurance against damages, so that all those who have acquired their house through a mortgage should take out this type of insurance that is different from home insurance. While home insurance is not mandatory, damage insurance is mandatory when buying a home.
However, for some time now, the European Parliament has approved the future application of a Directive that prohibits forcing a mortgaged person to take out home insurance and will be fixed in all countries belonging to the European Union. With this fact, it will make the homeowner freer when hiring home insurance, and in addition, he can choose if he wants to acquire the insurance between various options and not be so linked to the bank that He has granted the mortgage. With this fact, the obligation to link a mortgage to home insurance is prohibited.
So, when hiring insurance for our home, we must remember that, unlike other policies in which it is mandatory to purchase them (such as car insurance), this type of insurance is not mandatory. However, it is advisable if the owner of the house usually rents it to other people or in different situations.
How to take out home insurance and the famous premium calculation
When deciding to take out home insurance, different aspects must be considered so that the policy acquired is best suited to our needs and preferences. In this way, it is crucial to calculate the home insurance premium, which is the price that the insured person pays for enjoying the coverage of the risk or risks by the insurance company. The insurance premium must be paid at the time the insurance policy is signed and once it is paid, the coverage will begin to take effect within 24 hours.
But how can we calculate the premium of our home insurance? For this, we must consider:
- The type and use of housing. It should be considered if the house is second use (holiday) or first-use since if the person always lives in the home the insurance premium will be higher because there is more risk of any unforeseen event. Thus, one should also consider what materials the house is made of and the number of square meters it occupies.
- The continent and the content. The continent is the external area of the house such as the building, parking, or fixed installations of water, gas, electricity. However, the content is formed from all the assets that are inside the home such as appliances, jewelry, and clothing.
Once these parameters have been calculated, when we go to any insurance company, they usually give us a kind of form to fill in with different data on housing, guarantees, and contracting data by the insured. It is important to compare different offers that several insurance companies have provided to choose the best option and contract the insurance policy that best suits us in terms of the price and coverage ratio we want.
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