Homeowners insurance is usually required if you have a bank loan or mortgage. So that’s a pretty good reason why you requires it.

Even if your not obligated to get a home Insurance, it provides a peace of mind that at the end of the day you have a secure place to fall upon and relax.

Home insurance isn't a luxury; it's a necessity. Your home may be your lifetime investment and why not protect it from the danger of destroying it by various hazards. In few seconds/minutes your home could be destroyed from a catastrophic weather event like hurricane, storm, Tsunami, Flood. Even from a exposure of your domestic gas cylinder, kitchen fire, by a malicious and riot and strike situation your house can be totally destroyed. In this world of uncertainty the home insurance will provide some certainty and a peace of mind that your home is protected from certain events outside your control (“perils,” in insurance-speak), including fire, lightning, windstorm, hail, smoke, vandalism, damage from aircraft or vehicles, bursting of pipe and riots, to name a few.

Even if you make it to the end of a year without having filed a claim, you shouldn’t feel like you’ve wasted money on your insurance policy. After all, it allowed you to rest easy, knowing you’d be protected in the face of a worst-case scenario.

Usually “Home Insurance” is a named perils insurance policy which provides cover against;

• Fire & Lightning
• Malicious Damage
• Explosion (Domestic gas cylinders & boilers)
• Impact Damage
• Bursting & /or overflowing of water tanks, pipes
• Cyclone, Storm, Tempest
• Flood
• Earthquake with Fire & Shock
• Other Natural Perils (Hurricane, Typhoon, Tornado, Hailstorm, Windstorm, Rainstorm, Thunderstorm, Volcanic Eruption, Tidal waves, Tsunami)
• Electrical Extra

Burglary, Riot & strike and Terrorism aren’t covered under your standard homeowners insurance policy. You’ll need to take out a separate policy to get coverage for these scenarios, which is highly recommended for homeowners. However your policy can be extended to cover against these hazards at an additional cost.

• Mold
• Server backups
• Accidental losses resulting from any other enent other than the events mentioned in the cover. (if there is a limit mention)
• Burning of property by public authority
• Loss by theft during or after a fire
• Bullion or unset precious stones
• Losses to your documentations (etc)
• Insect infestations, like (cringe) bed bugs
• General wear-and-tear
• Damage from construction / erection work
• Injuries caused by certain breeds of dogs
• Nuclear hazards
• Explosives
• Goods held in trust or on commission

One of the best tips for home owners on the lookout for an insurance policy is to first determine the insurance costs that will be required. The best way to calculate how much is needed is to evaluate the age and the condition of the home as plumbing and other elements of an older home will require more than a newly built home as these elements are less likely to need replacement or cause damage.

There are two main types of home insurance in Sri Lanka:

• Reinstatement Value - What it would cost to repair or rebuild your home to the same standard as immediately before the damage
• Market Value - The value that the property can sell in today’s market (includes depreciation)

So, get the exact value & insure the property for that same.

It is recommend to insure the house for the the cost to repair or rebuild your home to the same standard as immediately before the damage with out any depreciation. Yet if your house is old or a if there is an aesthetic value associated with it then you will have to discuss with the insurer on the basis of insurance.

When it comes to contents it is ideal to insure for the cost you may incur now to buy the same contents of similar features in the market.

The price of your homeowners policy can vary significantly, depending on factors like your home’s condition, location, and your coverage amounts. Here are 5 factors that can determine how much your homeowners insurance premiums will cost.

Don't be surprised to find that the location of your home directly influences the insurance premiums and the types of coverage. Home owners based in a tsunami or similar natural disaster-prone areas will have to pay more for their insurance policy than a homeowner in the heart of Colombo. This is due to the fact that various natural disasters and other location-based factors will influence whether your home can be insured against flooding or similar circumstances.

Further if your home is located in a lighting belt or in areas where crime rates are high then that will also influence the pricing.

The current state of your home will impact your homeowners insurance premium. Ask yourself:

• How old is the house?
• Have you replaced the roof recently?
• What kind of renovations has the property been through?
• The nature of electricity and construction

In general, the older your house is, the more prone it is to damage, so expect this factor to influence your rates.

This refers to the costs you are willing to bear out of your own pocket in the event of a natural disaster, fire, water damage etc. once the claim has been filed. It is best to choose a policy that offers a higher deductible as it can bring your premium costs down significantly.On the other hand, homeowners may consider paying a higher premium a worthy trade-off for small losses & also means you’ll pay a lot more out-of-pocket in the event of a claim

We already discussed how much coverage you need for each category, but the amounts you pick have an impact on the final premium price. Setting a higher level of Dwelling Coverage will, understandably, increase your rate.

Like equipment breakdown or buried utilities coverage, will also cost a bit more.