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The Ultimate Guide to Home Insurance

Home Insurance provides a safety net for you and your family when certain unfortunate events happen like theft, fire, burglary etc. It’s your home and you need to protect it. When shopping for home insurance, there’s much more to consider than how much your coverage will cost. You need to buy the right type of policy. You need the proper level of protection, plus special provisions for valuables such as jewellery, your computer equipment and other possessions.

Lending institutions usually require mortgage customers to purchase homeowners insurance. Don’t rely on the coverage levels mandated by your bank or mortgage company. Those levels are designed to protect the house itself, but not necessarily your possessions. That’s why it’s important to check with your agent or insurance company, to make sure you have adequate coverage.

Most of the home insurance policies cover Losses Caused by:

  • Fire and lightning
  • Aircraft & vehicles
  • Vandalism and malicious mischief
  • Theft
  • Riot and civil commotion
  • Explosion
  • Smoke
  • Windstorm, hurricane, and hail

Most Policies Do Not Cover Losses Caused by:

  • Flooding
  • Earthquakes
  • Termites
  • Insects, rats, or mice
  • Freezing pipes while your house is unoccupied (unless you turned off the water or heated the building)
  • Wind or hail damage to trees and shrubs
  • Losses if your house is vacant for 60 days or more
  • Wear and tear or maintenance
  • Water damage resulting from continuous and repeated seepage

Choose insurance protection that’s right for you. Choose a company with a good reputation, easy availability, better customer service and support with a variety of coverage options at an affordable price. Protect your assets, possessions, home and your family with insurance.

Types of Home Insurance

A home insurance policy is basically a contract you make with an insurance company. In exchange for your premium, the insurance company will pay for financial losses related to your home or your property during the period of the contract. The insurance company also agrees to pay for damages resulting from injuries or damage to other people for which you are held legally responsible.

When you’re searching for home insurance, you’ll want to shop for the type of policy that will fit your needs best, with adequate protection for your valuable possessions and supplemental coverage to protect against natural disasters that are not covered in your basic policy. If you’re like most people, the owner of the mortgage of the home will require homeowners insurance.

Home policies provide two types of coverage:

  • Property Coverage

  • Liability Coverage

1) What Is Property Coverage?

If you are like most people, your home is your single largest investment. Protecting your home from disaster or theft is critical to maintaining that investment and your mortgage. Often life throws unforeseen situations into your lap and you, as the homeowner, are forced to deal with these situations. Home insurance offers you a sense of security with the knowledge that you are prepared for the unexpected.

Property coverage pays for: 

  • Damages to your home
  • Damages to other structures on your property
  • Damages to your personal property

In considering property coverage, there are four main issues to think about:

  • What business property should you insure?
  • What perils will the property be insured against? In other words, under what conditions will you be entitled to receive payment from the insurance company?
  • What dollar amount of insurance should you carry?
  • Should you buy coverage for replacement cost or for the present value of the property?

What Is Liability coverage?

Liability coverage typically helps to provide you with peace of mind. Why? Because it helps protect you from covered damage your car does to others, damage for which you are legally liable.

It is broken into two parts:

A) Personal Liability Coverage: This coverage pays when you or a resident family
member is found legally responsible for damage to the property of others or injuries to persons who are not members of your household. For example, If your Neighbour slips and falls in your kitchen, you might need these coverage’s to help pay for medical expenses.

B) Medical Payments To Others: Pays medical bills if someone (outside of your family) is injured while on your property, or is injured by you or a resident family member away from your property.

What is Home Insurance Plans?

Insurance is something most people don’t even want to think about until they need it the most. But, understanding what is and isn’t covered in your home insurance policy can mean the difference of being able to rebuild your home and replace your personal belongings. Home insurance can be broken down into 7 basic types of plans. What differentiates them from one another are the types of circumstances they cover.

Home insurance can be broken down into 7 basic types of plans:

  • Basic Homeowners Policy: Covers your house against 11 types of disasters:
    aircraft, wind/hail, explosion, riots/civil unrest, fire/lightning, vehicles, volcano eruptions, vandalism, theft, smoke, and self-damaging instances (part of the building falls on itself, etc.).
  • Broad Homeowners Policy: This plan includes #1, in addition to damage resulting from snow, falling objects, ice, water damage and electrical damage It is 5 to 10 percent more expensive than a 1st policy.
  • Special Homeowners Policy: It is the most common type of insurance policy. It covers damage resulting from all-natural disasters in addition to all of the above. he only disasters that this doesn’t cover are flood, earthquake, war, and nuclear blasts. Costs 10 percent to 15 percent more than a 1st policy.
  • Renters Policy: Covers all the items in addition also includes liability coverage. You could be held responsible for injury to another person or damage to another person’s property if an incident occurred within your rented residence, or elsewhere. Without liability coverage, your current and future earnings could be at risk. Renters insurance may also provide legal defence costs.
  • Extensive Homeowners Policy: Covers damage from practically everything except earthquakes, wars and floods.
  • For Owners Of Co-Ops Or Condominiums: Provides personal property coverage, liability coverage and specific coverage of improvements to the owner’s unit.
  • Policy For Older Homes: This policy is designed for older homes with historic value. but pays only for repair costs or actual cash value The rebuilding/replacement cost is not covered in this.

What Is Homeowner Insurance?

Homeowners insurance provide financial protection in the event of damage to your home due to any disaster such as earthquake, fire, floods etc. It covers damage to your property caused by most disasters and for any injuries and property damage you or members of your family cause to other people.

The standard homeowner’s policy covers the following:

1. Structural Cover: Any damage caused to your home by natural disasters
like fire, hurricane, hail, lightning, flood, earthquake is covered in the policy.
You are paid back for the repairs to rebuild your home.

2. Personal Belongings: The policy should cover your personal belongings such as furniture, clothes, sports and other personal items that are either damaged in a fire
or a hurricane or has been stolen. Expensive items like jewellery, silverware are also covered. you can also opt for coverage of your plants.

3. Liability Protection:  We can understand it by dividing it into certain points:

  • This protects you from bodily injury or property damage that you or family members cause to other people.
  • The liability portion of your policy pays for legal defence.
  • Helps pay medical bills of those injured on your property or through your personal activities

4. Additional Living Expenses: You are paid for the living expenses (like hotel bills, meals and other living expenses) while waiting for repairs to your home.

What Is Renters Insurance?

Renters insurance covers damage or loss to the property of those who rent an apartment.
While your landlord might have insurance, it only protects the building. Your landlord’s policy will not cover your personal property. Anyone who rents must go for renters insurance.

There are two kinds of payouts: 

  • Actual Cash Value: This type of coverage pays an amount equal to the current cost to replace your items minus the depreciated value.
  • Replacement Cost Coverage: This type of coverage pays you the amount it would cost to replace your lost or damaged property.

Renter’s insurance provides liability protection from:

  • Fire or lightning
  • Windstorm
  • Theft
  • Smoke
  • Vandalism or Malicious Mischief
  • Windstorm or hail
  • Floods
  • Damage from a burst water pipe
  • Riots or civil commotion
  • Aircraft and vehicles
  • Freezing of plumbing system
  • Falling objects
  • Medical payments to guests (which pays for medical expenses of nonresidents i.e. someone who doesn’t live at the rental property and gets injured while at stay.)

Your coverage will include liability protection, which covers damages as a result of unintentional bodily injury or property damage to another person.

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