Home Insurance: What is it, and How Does It Work?

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Most people will assume that a house is an asset and a very big achievement in their lives, this is certainly very reasonable, considering the house is obtained with a very long process and hard work for a long period of time.

By looking at the facts above, it is only natural that you will always want all the best care and protection for your home. This will prevent you from experiencing a number of risks of loss that can come at any time to the house, because basically no one of you can predict when disaster will come. For that, you need a protection from the start, namely by using home insurance.

Home Insurance and Benefits
Although it is not as famous as life insurance and health insurance, home insurance has also been well-known and widely used by the people of Indonesia. This is because of the high public awareness of the various risks of loss and also natural disasters that can occur at any time.

Home insurance is insurance that provides protection against the occurrence of losses due to fire, theft, or damage caused by natural disasters.

By having home insurance, all forms of risk of losses arising from the various things mentioned above, will be borne by the insurance company. That way, you can be calm and feel comfortable because your assets have maximum protection that will prevent you from worrying and even fearing these things.

Imagine, what would happen if at any time a fire disaster struck your house and consumed all the buildings and assets in it at once? This event will certainly be very scary, right? Given that a home is a high-value asset and has historical value for you and your family, you will be emotionally devastated by the incident. Then what about the repair?

If you do not have insurance, then any losses incurred as a result of the incident will be your own responsibility. It's easy if you have enough funds, but what if you don't have funds for that? So you can be sure you and your family will get worse and experience financial difficulties, disruption in handling jobs that bring in regular income every month, it is difficult to return to the initial position or condition.

Never underestimate the problem of home insurance, the protection is very large and has benefits that are very important for you and your family. Not only major damage, but also other minor repairs due to natural disasters will also be covered.

Types of Home Insurance
When you talk about protection, naturally you will always want the best protection you can get. This of course you do with the aim to minimize the risk of losses that may arise at any time in the future. Based on the services provided, home insurance can be divided into two types, namely:

1. Property All Risk / Industrial All Risk

This is a type of fire insurance that is unnamed perils, which provides guarantees for all risks that occur in the property and / or interests insured, except the risks listed in the exception, namely: war, terrorism, nuclear and radioactive; delay, loss of market share or business interruption; intentional, dishonest employee: mechanical damage and boiler; wear, corrosion, the nature of the item itself; pollution or contamination.

Guarantees provided by Property All Risks (PAR) Insurance services include:

Guarantees for riots, strikes, bad deeds and riots.
Guarantees for hurricanes, storms, floods and water damage.
Guarantees for earthquakes, volcanic eruptions and tsunamis.
Guarantees for landslides and land movements.
Basically, Property All Risk (PAR) insurance only applies to non-industrial buildings, such as: offices, homes, hospitals, schools and various other property buildings. As for industrial buildings, such as: factories, warehouses, malls and shops, Industrial All Risk (IAR) type insurance will be used

2. Indonesian Fire Insurance Standard Policy (PSAKI)

This insurance is a standard policy issued by the Indonesian General Insurance Association (AAUI) as a form of fire insurance service. The benefit of this property insurance product is to provide protection for property and / or insured interests that are directly caused by: fire, lightning, explosion, fall of aircraft, and smoke.

However, in addition to the main benefits listed in the PSAKI, fire insurance can be extended with collateral for other risks that are not guaranteed in PSAKI, including:

Riots, strikes, damage caused by bad deeds, riots.
Floods, hurricanes, storms and water damage.
Landslide.
Demolition.
Business interuption (loss of profit)


How it works Home Insurance
Before deciding to buy a product, then of course you always want to know about the pattern or way of working of the product. thus, you will not be disappointed or even feel harmed by the purchase. This will also apply in home insurance, you certainly want to know clearly the benefits and ways of working that are applied by insurance companies in the products that you will buy.

Example: You own a house with a building area of ​​100 square meters, with a sum insured of Rp.400,000,000.

The sum insured will be obtained by calculating the amount of funds that will be needed to build the 100 meter house at this time. If at this time a fund of IDR 4 million is needed to build every one square meter, then for a house of 100 square meters, IDR 400,000,000 will be needed.

However, in addition to the physical building of the house, you can also insure the assets contained in the house. For example, the value of the assets you have is IDR 100,000,000, then the total value of your insurance is IDR 500,000,000

After getting the sum insured, you can multiply that value by unit permil, so finally you find the annual premium value that you must pay, which is equal to Rp. 750,000. This amount is certainly very far compared to the insurance coverage you will get, right?


Tips for Choosing Home Insurance
Today there are many insurance companies that provide home insurance services, so you have many choices. However, given the importance of the protection you will get from a home insurance service, it is only natural that you consider this very carefully. Here are tips on choosing home insurance that you can consider:

1. Choose the Best Insurance Company

The main thing that you must consider is choosing the best insurance company, you can do this by looking for a variety of adequate information from the internet or by visiting insurance companies that are in your standard.

Find an insurance company that has good credibility and reputation, this will be a guarantee of the service you will get from them. Use only trusted insurance companies and can meet your needs for qualified insurance services.

2. Use the Right Policy

Make sure you know well, fill in the entire insurance policy that you will buy and use. This will prevent you from the risk of loss and various problems that occur due to misinterpretation of the policy from the start. If you find that you have a problem learning the contents of the policy, then it's a good idea to ask an expert or insurance broker.

3. Select Adequate Coverage

In buying an insurance policy, make sure the amount of premium you pay has met sufficient protection coverage, so you can avoid the risk of getting a low coverage. Calculate and carefully consider each component of coverage that you will get, so that you can get maximum benefit from the purchase of insurance that you use.

Source : https://www.cermati.com/artikel/asuransi-rumah-apa-itu-dan-bagaimana-cara-kerjanya


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