We in KBC Bank Ireland want to make the process of home buying as smooth as possible. Decisions regarding insurance will be on your ‘to-do list’ once you decide to buy a home and we’ve put together some simple “Do’s” and “Don’ts” to help you along. There are two basic types of mandatory insurance that you will need to consider when taking out a mortgage, which are life insurance and home insurance.
Do budget for monthly or annual payments for your life insurance. If you have a mortgage, you will need to get a life insurance policy. As you would when factoring in the cost of servicing a mortgage and paying the local property tax, include the cost of your life insurance policy.
Don’t get confused if someone refers to your life insurance policy as ‘mortgage protection’. It’s, in essence, the same thing.
Do look at all your options. The contributions to a life insurance policy may change over time so make sure you know what is expected of you in the future.
Don’t forget that if you are buying as a couple, you will both need a life insurance policy. You may be able take out a joint policy though.
Do remember that home insurance is a pre-condition for drawdown of your mortgage and your mortgage provider may require evidence from time to time that your Home continues to be insured.
Don’t operate under the assumption that most house insurance policies cover the purchase price of your house should a claim be made. Most refer to the cost of rebuilding also known as ‘reinstatement value’.
Do pay special attention to the features of the policy. Insurance policies that provide for home emergency response can suit you in a crisis.
Don’t think all home insurance policies are the same. There are different policies for properties that you buy-to-let and those that are owner-occupier.
Do factor in the contents of your house. These are often the most precious family items and you can find a policy that will ensure these are covered.
Don’t forget that public liability should be included in your insurance policy. e.g. for potential accidents involving visitors in your home. Check for this.
Do recognise that, should you need to move out of your home in the case of an accident you and your family will need alternative accommodation. Make sure the policy offers this.
For more information on your insurance options when purchasing a home, please visit http://www.kbc.ie/insurance .