Can home insurance be paid monthly?

Posted on: Jan 13, 2023 | | Written by:

Can home insurance be paid monthly?

Published on January 1, 2023. EST READ TIME: 3 minutes

Is monthly payment of home insurance allowed?

The homeowner’s insurance payment frequency is directly dependent on the mortgage limit and if you pay it directly to the mortgage lender. There might be the option for the monthly payment of the property insurance. However, in this context, it may not be the most feasible and wise move, according to the experts. This article will highlight all the relevant aspects of home insurance and its payment frequency.

How is homeowner’s insurance paid?

Under normal circumstances, lenders need homeowner’s insurance while lending out a mortgage against the concerned property. Such a procedure ensures that both you and the lender remain automatically covered against natural disasters or fire outbreaks that might lead to damage and/or destruction of the said property. Once this is paid off, maintaining this insurance acts as a protective shield against any such damages or destruction to your home.

The outright possession of such property offers better flexibility to choose the desired frequency for making the insurance payments according to your requirements and the current circumstances. You can directly pay the premium amount to the concerned insurance company.

Can home insurance be paid monthly?

How often you need to pay the premiums depends on the internal policies of the concerned insurance company you have chosen. If it is allowed, you can pay the insurance premiums yearly, half-yearly, quarterly, or even monthly, depending on your requirements and preferences.

Before making the final settlement, it is best to read the policy documents carefully to know the exact terms and conditions of the chosen plan and then proceed accordingly.

In the case of a property mortgage, you need to consider the demands of the lender too. Direct payment to the insurance company allows you to choose the frequency of payment. However, if the concerned lender needs you to maintain an escrow account, then the payment frequency is generally limited to only once a year.

You can well understand that depending on the circumstances, you are allowed to pay home insurance premiums monthly. But this only increases your botheration of paying the dues every month, making it all the more complicated. That is why the experts suggest you make the payments once a year to keep the procedure simple.

Should you pay homeowner’s insurance monthly or annually?

If you possess an outright household property, you are allowed to pay your insurance premium dues directly to the insurance company you have selected. Although you get the option of monthly payment of the insurance dues in small instalments, however, the annual payment is a more feasible option. You are able to save your finances by such lump sum payments and manage your finances well, especially in the long run.

Such lump sum payment at one go may seem to be a financial burden, but if you consider your prospects closely, you will be able to discover that paying in monthly instalments leads to excess drainage of your money.

Several insurance companies offer special rebates and discounts on annual payments of premiums and may even charge a convenience fee or installment charge towards monthly payments. Such installment fees cover the processing charges of additional payments, particularly in the case of monthly or quarterly payments. It gets repeated with each installment you pay.

This additional fee may not seem to be very significant but considerably adds up to your finance drainage in the long run.

If the yearly payment of a single lump sum may prove to be a difficult affair for you, you can opt for considering the total amount of your annual premium and then dividing it accordingly into 12 equal divisions and maintaining a separate sinking fund. This way, you will be able to manage your finances better without causing any extra burden and meet all the necessary requirements with ease.

Irrespective of the circumstances, you are always required to pay the initial premium of your property insurance upfront. You need to keep yourself prepared to handle this expense as and when you pay off your concerned property.

Advantages of home insurance

Some of the major advantages of maintaining home insurance in India include the following:

1. Financial help and coverage for repairing the concerned property in the case of any unfortunate mishap

2. During any third-party damage, this insurance provides coverage

3. With this insurance, you can easily avail of home loans

4. If any third party causes any damage to your property, you can easily settle it without any legal hassle

5. This insurance even covers damages caused by man-made hazards like theft, burglary, riots

6. It even covers damage or loss of personal belongings like gadgets, furnishings, jewellery, etc.

7. Certain companies even offer tenant’s and landlord’s insurance, which can be utilised accordingly depending on the circumstances.

Essential details needed for home insurance calculation

The details required for home insurance calculation for an owned property include the age of the concerned building, the construction cost, the total built-up area, the personal details of the owner, including the contact number, name, address, etc. and the value of the contents available in the property.

In the case of rented property, the essential details required include the total value of the available contents in the property, including jewellery, vehicle, gadgets, furniture, etc., along with the tenant details like name, contact number, address, email id, etc.

FAQs

1. What is the average home insurance cost?

Home insurances in India are relatively inexpensive. Depending on the building value and the value of the available contents, the premium value is decided, which offers protection against allied disturbances and natural disasters like earthquakes, cyclones, floods, terrorism, etc.

2. How to ensure underinsurance coverage?

The general trend of real estate is to get appreciated over time. It depends on the owner of the concerned property to keep track of this appreciation and ensure insurance coverage accordingly, which will eventually prove to be in vain.

3. What happens during a home insurance claim settlement?

Under normal circumstances, the insurance providers do not check the concerned property or its contents before offering insurance coverage. However, during a claim raise, they ensure to verify all the aspects with close scrutiny. Being the insured, you must possess all the relevant bills and documents and produce them as per requirement.

Conclusion

This is a comprehensive discussion of the most important factors of property insurance. Before settling for any one plan, you must carefully compare different plans, considering the coverage, additional coverage, inclusions, exclusions, the performance of the concerned company, and cost comparison to ensure the best-suited plan for yourself.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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