Home insurance is an insurance policy that covers the costs and damage to your home or any insured property. It is a form of property insurance and one of the several types of general insurance products.
Home insurance is also called homeowner’s insurance. It safeguards your bungalow/apartment/rented flat/owned house/built home against potential risks. It covers the costs of damages due to any unfortunate event. Home insurance can be claimed for damage due to the following causes:
1. Natural calamities such as windstorms, hails, fire or lightning
2. Man-made problems like riots, theft, vandalism, or property destruction due to any civil commotion
3. Damage due to rail or road constructions
4. Collision of airplanes or any vehicle (not your own)
5. Explosion or smoke
The home insurance policy covers various kinds of damage. For example, damaged electric lines/wires, water pipelines, or structure damage. It also provides coverage for broken windows/doors/floors/walls. Not only the house but also covers for the loss and damage to the contents of the house. It can be broadly divided into four kinds of costs on the insured property as below:
Home insurance policies may differ in what coverage they provide depending on certain factors. It varies according to the residence type (rented/owned) and size of the residence. Other characteristics like age, place of residence, replacement value, and location as well as the cost of belongings also matter. Your claim history or crime rate in the area can also matter. Finally, it depends on you what kind of coverage you choose. It is your choice about the amount of premium and deductible you are ready to pay. The deductible is the amount you have to pay before making the claim if the premium amount falls short of. When the deductible is high, the premium is less and vice-versa.
You should have a home insurance policy because it covers the financial loss. You may also have to bear the damage to property and its belongings under conditions not controlled by you. The benefits of a home insurance policy are:
1. You can get monetary aid for repair and damage control due to unfortunate events
2. If a third party causes damage, you can claim insurance without getting into a legal rift
3. It is easier to get a mortgage (home loan) for repair/reconstruction/expansion if there is property insurance
4. The costs of loss of home’s belongings and content can also be covered up. Home belongings like appliances, furnishings, furniture, gadgets, or jewelry
5. Coverage is there not only for damages due to accidents or calamities but also due to theft, robbery, or burglary
6. There are types of home insurance policies that are designed to cater to specific requirements. These policies include Landlord’s Insurance or Tenant insurance. The landlord can claim the landlord’s insurance when the tenant (public liability) does damage. Also, when there is a loss of tenant’s payment (rent) due to other reasons. Similarly, the tenant can get insurance for his/her own belongings in a rented flat