Financial Education
Jan 19, 2021

Home Insurance; Is it Profitable?

asuransi rumah

Indeed, many people already know about insurance.  In fact, there are many people who know in detail about the ins and outs of insurance.  But for some reasons, people’s interest in insurance is still quite low.  Actually this is quite a contradiction between reality and what society wants.  Just look at how people in general will refuse to become insurance holders for their assets even though they really want to be certain that nothing bad will happen to their assets. For example, Home Insurance.  When asked whether people want to become members of home insurance policyholder, only a few said yes.

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However, everyone would want their home to be fine.  They realize that home is their shelter.  They also realize that home is the best place for them to rest, relaxing, hang out with their loved ones and get entertainment.  However, when they were presented with an offer of insurance, they refused.  Even though many of these people know how insurance can provide protection to their homes.

Well, let’s assume that most people know nothing about home insurance.  How can this kind of insurance work and provide protection for our homes?  What will be our obligations and rights? Actually, what is home insurance? Let’s try to discuss it here.  You might later agree that insurance is not something that will harm you, instead it will bring numerous positive effects on you.

Home insurance, as the name implies, is insurance provided by an insurance company to protect your assets, in this case a house.  We are unable to know for sure what the future holds for your home.  No intention to make you worry, however there are actually a lot of unfortunate events that can happen to your home.  Take, for example, fires and natural disasters.  Both of these things can easily make you lose your home.  Your house that was destroyed by these two things is of course your loss.

However, if you have bought home insurance, you don’t need to worry anymore. Basically, the insurance company will help you to ease your financial burden or even will take care of this financial burden completely.  In this case, when there is a problem with your house such as being damaged by fire, the insurance company will compensate an amount of money, which amount was previously agreed upon when you registered to become an insurance policyholder.  For example, when you have bought a house for Rp. 100 million. Then you buy insurance and you are obliged to pay a premium of Rp. 1 million each year for a period of several years as determined by the insurance company.  When suddenly the risk damage occurred to your house such as mentioned above, you can receive compensation from the insurance company, the amount of which can vary, such as the price of your whole house or 80% or another amount as previously agreed when your purchase your insurance cover.

Does this not sound very lightening for you as a home owner, if the unfortunate things happen to your home?  What if bad things don’t happen to your home? Generally, the premiums that you have paid will be returned to you.  But there are also some insurance companies that do not return it in full or do not return it at all.  Of course you have to be careful in choosing home insurance.  Make sure you get insurance from a well-known company so that the premiums you pay regularly won’t be just wasted.