Home indemnity insurance protects your home and its fittings for damage caused by natural calamities, such as fire. It even covers you and your family if you are liable for an remodelling or building fault. But what exactly is home indemnity insurance? What are the terms of your policy? What are the options available to you when it comes to choosing a home indemnity insurance policy?
The basic policy that home indemnity insurance policies cover includes a dwelling, and its furnishings and fixtures. The dwelling may be a house, flat or renting space. The furnishings and fixtures are the items inside your home. If your residential building work cannot meet the original contract, the home indemnity insurance policy must cover the difference.
There are some situations that may complicate your claim for home indemnity insurance. For example, if there is an extra fee for using a public amenity (such as a swimming pool) and you have not paid for it, then you may not be able to use it. In such a situation, the insurance policy must compensate you for the difference. Similarly, a change in the building permit, due to non compliance with the planning regulations, could cause you major financial loss.
Home indemnity insurance policies generally come in two categories: buildings and contents. If the property is damaged by any cause other than fire, a builder’s property will be covered. You can obtain hii, or a copy of the Builders Licence, from your local authority.
Home indemnity insurance is very commonly required for multi-unit developments, especially for those who are majority residents and/or owners. The construction of multi-unit developments, also known as multi-family dwellings, has become widespread over recent years, owing to the escalating cost of housing. As well as providing coverage for the building itself, home indemnity insurance also covers the individual components of multi-unit dwellings. For example, fixtures such as double glazed windows and doors, boiler, central heating system, electrical wiring and water supplies are all part of the indemnity policy. Where there is more than one unit on the property, separate indemnity policies may be obtained.
There are different classes of home indemnity insurance, depending on the level of cover you require. In general, there is home insurance for residential buildings, which covers defects in materials used, with specific provisions for practical completion. A policy must cover all defects in the property, to the extent that would arise through normal wear and tear, regardless of whether the property was completed. If you were constructing the residential building work and discovered a flaw within the construction or during or after completion, your policy must provide you with financial assistance to remedy the defect.
Home indemnity cover also protects subsequent owners of residential buildings against damage due to faulty installation, regardless of whether the property was originally constructed by a builder. While normally this type of insurance would protect owners against damage incurred within the building itself, it may also cover subsequent owners of the property for up to three years after the original owner’s death, or up to twenty years after the end of the warranty period provided with the quote. In order to qualify for the longer warranties, the buyer must have purchased the property directly from the manufacturer. The warranty is not transferable between family members, nor between corporations, nor between governments or municipalities, as stipulated in the residential building laws in most jurisdictions. As long as the purchaser complies with the terms and conditions of the contract, he/she will receive a standard home indemnity insurance policy, without having to modify it to include the additional warranty provisions.
Home owners may purchase a separate policy that will cover the expenses for repair work that has been performed by experts on the house. The policy typically provides coverage for expenses such as fixtures and appliances, carpeting, wall paper, and exterior home improvements made by the builder. In addition, such items as exterior flood lights, bells, garage door openers, outdoor gates, fences, exterior lighting and landscaping usually receive additional coverage under a separate indemnity insurance policy. In order to receive full reimbursement, home owners must provide a copy of the certificate of hii policy to the insurer. This is to prove that the home owner was fully informed of all of the contents of the contract, including all necessary information that could change the terms of the contract during the term of the contract. This is also the key to obtaining reimbursement for any damages, which may exceed the balance remaining on the builder’s loan.