Is buying my home loan provider’s building insurance a good idea?
If you are in a position to invest in a new home, you can be sure that this particular investment will be the most rewarding.
It’s a monumental achievement in your life and comes with all its highs and lows. Due to the nature of the investment, there is a lot at stake when it comes to securing the investment. Insurance is vital to this part of the process. Yes, we all want to move in, unpack our boxes, hang up the paintings and consider new and exciting renovations. But the truth is, we need to consider the possibilities that we aren’t excited about, such as building destruction.
Building destruction? How, why, and where do I go about applying for this? Well, the short answer is that upon signing for your bond application, the lender will offer you buildings insurance as part of the package deal. This might seem like the obvious choice then, but don’t fall into that trap. Lenders know that you are all about convenience at this point of the bond application because it’s quite likely that you have undergone some serious, nail-biting stress in the last couple of months leading up to this point. In that case, they might charge you more than another lender would.
Don’t be tempted and fall into the trap of paying extra, simply buck up the courage to take on one last shopping experience. Shop for the best alternative financially and one that will benefit you and your new home!
Building insurance with the Banks
Banks will offer this type of insurance, but again, don’t approach them with your eyes closed either. In fact, there’s a life lesson there, don’t approach anything with your eyes closed, or you may well smack into something that could hurt you, and your wallet. Sounds painful, because it will be. Banks offer it typically as a condition of your bond, only to cover the potential loss on any monies provided on the loan that hasn’t yet been recuperated.
Going shopping, in this case, could mean lower premiums than the bond provider’s insurance will offer. Sure, the one-stop-shop mentality is great if you have all the money in the world, but if your name isn’t Rockefeller, then you can’t afford to throw away good money to bad deals. If it is, however, then trusting in the bank you currently bank with is perfectly fine.
Just cover all your bases and read the fine print!
Banks are known to be playground bullies. They’ll take your trust, your naiveté, and your money by offering you a number of products that you really don’t need. Just bear that in mind when you work through them, wear your mouthguard and be prepared to stand your ground.
Thankfully, we live in a country where choice is free and we are not obliged to succumb to any product offering bully tactics.
Choosing a building insurance provider
Now that you’ve done your homework and are ready to choose the best option for you, it would seriously behove you to do a little homework, and just when you thought you’d left that behind in your blocked-out memories of high school days. But seriously, doing some research here is only going to end with a positive outcome. Take a look at the policies in the market currently and make sure that you understand all the fine print and whether there are exclusions to be taken into consideration. Just a heads up, a comprehensive cover is an ideal choice for ensuring your home is insured at its true value. Don’t be afraid to consult the web through the help of online calculators and comparison tools to make this decision just a little easier!