Home insurance is a form of property insurance that covers losses and damages to an individual’s residence, along with furnishings and other assets in the home. Home insurance also provides liability coverage against accidents in the home or on the property.
What is Home Insurance?
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.
Types of Home Insurance
Coverage and Detections
Home insurance is also called homeowner’s insurance. It safeguards your 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:
- Natural disasters such as windstorms, hail, fire, or lightning
- Man-made problems like riots, theft, vandalism, or property destruction due to any civil commotion
- Damage due to rail or road construction
- Explosion or smoke
Home Insurance Policy
The home insurance policy covers various kinds of damage. For example, damaged electric lines or wires, water pipelines, or structure damage. It also provides coverage for broken windows, doors, floors, or 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:
- Interior damage costs
- Exterior damage expenses
- Loss of personal assets from a house
- Coverage for physical injuries that may occur while on the damaged property
Home insurance policies may differ in what coverage they provide depending on certain factors. It varies according to the residence type rented or owned and the 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 you are ready to pay. The deductible is the amount you have to pay before claiming if the premium amount falls short. When the deductible is high, the premium is less.
Detections – Home Insurance
Although home insurance covers both natural and man-made causes, few accidents go uncovered. For instance, there is no coverage for intentional damages, damages due to neglect, or war situations. These count as exclusions. Listing a few of them below:
- Damage occurs due to low or zero maintenance and neglect of the property.
- No cover for damage due to termites, rodents, birds, rot, or molds.
- Although there can be a cover for fire and smoke in some circumstances, it doesn’t cover up smoke arising from industrial or agricultural operations
- If any damage is done by a home member intentionally or accidentally.
- Any destruction to the property under Ordinance of Law or court’s order.
- Damage due to nuclear hazards or war in the country.
Benefits of Home Insurance Policy
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:
- You can get monetary aid for repair and damage control due to unfortunate events.
- It is easier to get a home loan for repair, reconstruction, and expansion if there is property insurance.
- The costs of loss of home belongings and content can also be covered.
Types of Home Insurance
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 public liability does damage. Also, when there is a loss of tenant’s payment due to other reasons. Similarly, the tenant can get insurance for their belongings in a rented flat.
How to Claim Home Insurance?
To claim home insurance, you may need documents and evidence of the damage. Documents like police investigation reports and statements from authorized organizations. Also, a medical officer’s certificate of death or disability if required. Apart from that, you may need court summons, repair estimates, and proof of owned contents.
You have to pay the deductible for making a home insurance claim. The insurance amount you get will depend on the type of policy you have. It depends if your coverage provision will be based on the actual cash value or the replacement value. It is explained further below:
Actual money value gives the present value of a house. It deducts the depreciation from the cost of the item when it was new. Depreciation is the loss of value of a property due to the age and condition of the item. Depreciation calculation may depend on the insured item and the insurance provider
Replacement value coverage means it will cover the actual cost of the damaged property or an item. It will provide the insurance amount to replace it
It always helps to guard your property against unpredictable damage and associated costs. It is important to check what costs are covered and the exclusions before making a decision. You can take more than one insurance to get discounts.
Alternatively, you can agree to share the costs of repairs to lower the premiums. If you take insurance from more than one company, they can compensate on a proportionate basis when you claim the amount.
Although you can rent the insured house, if you sell the property, there is automatic cancelation of the home insurance policy.
1. Can I make a home insurance claim on a partially damaged house?
Yes, you can make a home insurance claim on a partially damaged house.
2. Can I increase the insurance amount for a home insurance policy later on?
Yes, you can increase the insurance amount for a home insurance policy later on by contacting your insurance provider and making changes in the policy agreement. You will also have to pay a higher premium or more deductible for a higher insurance amount.
3. Where to buy a home insurance policy from?
You can buy a home insurance policy from any designated bank or provider of your choice. There is no compulsion on the choice of a home insurance policy-providing company.