A home is a place, which offers us peace and warmth after a tedious day. However, there are chances of our shelter being affected by natural or man-made disaster or may be threatened with burglary. In order to safeguard our home from all these threats, it is crucial to opt for Home Insurance Policy. However, not many people in India, are aware of home insurance.
A good credit score is extremely crucial in getting any kind of insurance policy and securing a good premium on the same. However, it’s not only the premium amount that gets effected, but a failure to pay the same also impinges your credit score. Hence, we can safely say that credit score has a direct impact on the premium you pay for home insurance.
Key Benefits of Home Insurance:
- Comprehensive protection is provided for the structure and the contents of the house.
- Protection against allied perils, fire, burglary, etc. is offered. Apart from this, optional protection is provided against terrorism.
- The amount will also be offered for rent in a case; there is a need to shift to temporary accommodation because of the damage that has occurred to the premises.
- People can either opt for ensuring the structure or can choose to insure the belonging, as well.
- The losses covered are man-made, and the once that are caused due to natural calamities.
- The other aspects that will be covered are listed below –
- Burglary, Theft
- Aircraft Damage
- Impact Damage
- Cyclone, Floor, Earthquake, Storm, etc.
- Malicious Damage, Riot, Strike
- Landslides and Rockslides
- The bursting of pipes, water tanks, etc.
- Bush Fire, etc.
- Additional compensation for rent in case, the applicant opt for an alternative accommodation.
In order, to avail all the above-mentioned benefits, one will have to qualify for property insurance. One of the first aspects that will be considered by the insurance company is the applicant’s credit score. The better the score less will be the premium and more will be the risk covered.
However, it is unreasonable to conclude that a person with an excellent score will also have a heavy pocket. There is every possibility that a person played smart and was successful in attaining and maintaining a good score.
So, why is it that your credit score is given so much importance while you are shopping for home insurance?
The simple answer is that the creditors feel that credit score is a decent and an authentic predictor of risk. For people in business, it certainly doesn’t matter whether this gauging criterion is fair or not. For them, the most crucial things are the facts and the figures provided by authoritative bodies like CIBIL.
Hence to enjoy all the eye-catching benefits offered by the banks and insurance companies, one certainly will have to work for an exceptional credit score. Here are few tips which will help –
- Ensure that you pay your bills on time because this accounts for 35% on your credit report.
- Do clear your debts on time so that it does not bring down your credit score.
- Make it a habit to check your credit report periodically so that you can identify errors and rectify them on time.
- Act smart! Don’t ever think that by closing a paid off account you can boost your score. In fact, by closing an account you are reducing your total credit allotment. Conversely, it’s not wise to open a new account especially if you add debts to the same account.
To conclude, we can say that working for a good score is a perplexing task. One needs to be very smart and canny in attaining the same. A few nifty moves and you hold a decent report for a loan or an insurance application.