Expert Explains: How to Choose Home Insurance Suitable for Your Home

Postimees, a prominent Estonian news outlet, features insights from Marek-Meelis Puust, Head of Retail Banking at Luminor, on the critical importance of selecting the right home insurance. Puust emphasizes that while home insurance is often a mandatory requirement for mortgage holders, the extent of coverage needs careful consideration beyond the basic legal minimums.

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When choosing home insurance, one should consider whether their home and property can be restored to at least the same level as before the damage occurred in the event of an accident. Minimal insurance coverage usually only covers the main structural elements of the building, but in the case of major accidents, furniture, home appliances, and other property can also be significantly damaged.

Puust explains that comprehensive home insurance should aim to restore a home and its contents to their pre-damage condition. He highlights that minimal policies typically only cover the main structural elements, leaving furniture, appliances, and other personal belongings vulnerable in the event of significant accidents like fires or extensive water damage. The expert stresses that insurance plays a vital role in mitigating losses from common perils such as fires, leaks, theft, and severe weather events.

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The biggest damages are usually related to fire and water. For example, water leaks can cause extensive damage to the interior finishing and property of the home, and in the case of a fire, the damage can extend to the destruction of the entire building. In such situations, insurance coverage becomes particularly important.

Furthermore, Puust advises homeowners to look for policies that provide support for temporary accommodation and essential living costs if their home becomes uninhabitable due to damage. He also points out the value of liability insurance, which covers damages caused to third parties, such as a neighbor's property due to a water leak or a fallen tree. Puust encourages both homeowners and tenants to consider insuring their personal belongings, as these often represent a significant portion of the value at risk.

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Good insurance helps cover essential costs, such as temporary accommodation or expenses related to purchasing essential goods. It is also important that insurance covers long-term rental costs if necessary, as restoration work can take months.