Homeowner’s insurance is a type of insurance for homeowners which covers the things that are most important to them – their homes and belongings.
If something happens to your house or belongings, you can claim it. This could be because it was suddenly damaged by fire or flood or someone broke into your home and stole items from it.
Homeowner’s insurance is an essential part of any homeowners’ policy so getting one should be taken seriously if you want to protect yourself against such risks as theft and fire damage. Homeowners’ policies also cover other types of damage such as vandalism, burglary, storm damage, etc.
Homeowner’s Insurance Coverage
Some of the coverage benefits that a homeowner’s insurance policy provides are:-
- The home, building, or any other structures on the property.
- Personal property.
- Personal liability.
- Additional living expenses.
- Specialized coverages.
Buildings and Other Structures
The primary purpose of home insurance is to protect you against financial loss in case your home is damaged or destroyed. Detached structures on your property, such as a garage and tool shed, are also covered under a home insurance policy. The insurance coverage even includes landscaped trees, shrubs, and other landscaped plants.
Personal Property
Household belongings such as furniture, appliances, and clothing are covered by the personal property portion of a homeowner’s insurance. This insurance is usually up to a percentage of an insured value of the home and could be up to 55, 70, or 75 percent. For example, a home insured for Rs 50 Lacs might have a personal property insurance coverage of Rs 20 Lacs, i.e., 40 percent of coverage for household belongings.
Personal property insurance also includes coverage of items in the event of a theft. This coverage could be up to a specific limit, such as up to Rs 10 Lacs for jewelry. It also protects against the loss or damage of goods you take with you when you are away from home. For example, goods you take on vacation or use at work are usually covered up to the policy limit. Personal property insurance also covers the equipment you take on rent, such as electronic units, kitchen appliances, etc., while in your use.
Some homeowners’ insurance includes optional coverage for personal computers, including stored data, up to a specific limit.
Personal Liability and Related Coverages
Sometimes a person may face the risk of financial loss due to injuries to other people or their property. For example, a guest could fall on the staircase of your home and break their arm. A spark from electric equipment could start a fire and may damage a neighbor’s property. Your son or daughter could accidentally break an antique item while playing at a neighbor’s house.
You could be held responsible for paying for the damage in these situations. The personal liability coverage of a homeowner’s insurance protects you and your family members if others sue you for injuries or damage to their property. This coverage may also include the cost of legal defense.
Additional Living Expenses
If a fire or other event damages your home, an additional living expense coverage pays you to stay elsewhere. For example, you may need to stay in a hotel or rent an apartment while your home is being repaired or rebuilt. Your insurance company would pay for these extra living expenses. Some policies limit additional living expense coverage to 10 to 20 percent of the homeowner’s policy amount. They may also restrict the payment period to a defined period, say six or nine months. On the other hand, few policies may pay additional living expenses for an extended period, say, up to a year.
Specialized Coverages
Homeowners’ insurance usually does not cover losses from floods and earthquakes. If you live in an area with frequent floods or earthquakes, you would need to purchase special coverage.
How to Read a Property Insurance Policy?
Insurance policies do not invite casual reading. Consequently, many people fail to thoroughly examine their policies until a loss occurs, only to find that they had misunderstood the terms of the agreement. You can avoid such problems by systematically reading a policy before you purchase it.
Some of the fine points worth focusing on are:
Perils Covered
Some policies list only the perils that are covered; others cover all perils except those listed. In addition, the definition of specific perils may differ from that used in everyday language.
Property Covered
Like perils, the property covered under a policy may be listed individually, or only the excluded property may be recorded. Any new acquisitions must be added to the policy when the property is listed separately.
Types of Losses Covered
Three types of property losses could occur: (a) the loss of the property itself, (b) extra expenses that may arise because the property is rendered unusable for some time, and (c) loss of income if the property were used in the insured’s work.
Persons Covered
Insurance policies may cover only specific individuals. This information usually appears on the first page of the policy but may be changed subsequently in later sections.
Locations Covered
Where the loss occurs may affect whether it will be covered or not. Therefore, it is essential to know which areas are not covered.
The Period of Coverage
Policies are generally written to cover specific periods. Restrictions may exclude coverage during particular times of the day, days of the week, or year.
Loss Control Requirements
Insurance policies often stipulate that the insured must maintain certain loss control efforts. For example, coverage for a vehicle may be denied if the owner knowingly allows it to be driven by an unlicensed person. Likewise, a claim may be rejected if fire safety equipment is not installed and required precautions are not complied with.
Amount of Coverage
All insurance policies specify the maximum amount the insurer will pay for various losses.
The information on the above points may be spread throughout a policy. Coverage that appears to be provided in one location actually may be denied elsewhere. Carefully review the entire policy to determine the protection it provides. If necessary, contact the salesperson or company to obtain further clarification.
How to Choose the Best Home Insurance Companies Based on Your Needs?
Homeowners’ insurance is essential for the homeowner. It protects the homeowner from any damage caused by natural disasters, fire, theft, or vandalism.
The cost of homeowner’s insurance varies from company to company and on other factors like the property’s value, location, etc. Therefore, you need to compare the prices of different companies to find a company that will offer you the best value for money.
Home insurance companies have different policies and rates de ending on your needs, property, location, etc. The buyer of homeowner’s insurance should be well informed about the other policies available to them and what they can expect when they buy one.
It is not easy to find an affordable homeowner’s insurance policy. This is because finding a suitable home insurance policy requires a lot of research, time, and money.
You may need to search online and contact several agents before buying a homeowner’s insurance. Online information and agents may provide multiple quotes as per your need.
A good agent will be able to give you several quotations from different companies and will help you decide which one is best for your needs. They should also be able to offer discounts on premiums that are unavailable in most other insurance companies.
Conclusion: Are you ready to improve your life with homeowner’s insurance?
A homeowner’s insurance policy covers your property and liability should an accident occur. It also protects you from paying for damages caused by another person or the property itself. The policies are designed in a way that they can be tailored to suit each homeowner and their specific needs. This is why we have decided to look closely at the different homeowner’s insurance policies and which one is right for you.
A homeowner’s insurance policy will require some cost in the form of premium but will provide peace of mind knowing your insurance coverage is there for you.
