Home insurance is also known as homeowner’s insurance or house insurance. It is a property insurance that covers private homes. If an individual resides in a home it is a regular home insurance. If there are other types of reasons – like a vacant house or a guest house used sparingly, it is covered under alternate dwelling policy. A comprehensive home insurance covers both types of categories. Often people ask – what are the top 10 reasons for getting a home insurance. The answer is simple – a home insurance gives you a peace of mind, it provides safety for you and your family and above all it protects your investments.
• A home insurance policy combines personal insurance coverage, covers for losses due to human negligence or nature disasters, covers for contents inside the home – interiors, furnishing, clothing and valuables. It also provides for alternate dwelling in case of some damage.
• A comprehensive home insurance includes a Fire Insurance policy. Fire Insurance protects the home and its residents from the costs incurred by fire (fire damage or fire destruction or relocation in case of fire). There are four types of fire insurance policies that one can bundle with the home insurance – one that pays the actual value of the property damaged in the fire, the next that provides an adequate replacement, the third that replaces a specific component damaged in the fire and the fourth that provides reimbursement to the fire victims for relocation expenses. Almost all fire insurances cover the belongings that are destroyed in a fire – interior, furniture, clothes and valuables.
• A home insurance policy provides coverage for the home against various risks – such as fire, lightning, windstorm, hail, vandalism, mischief, theft, damage, civil vandalism, breakage, smoke and volcanic eruption.
• A comprehensive home insurance can also include tenants’ insurance. This is very useful as it covers for liability for the tenants and indemnifies the home owner from costs and damages.
• In case of damage to the home and the event of a risk occurring, the home owner will mitigate losses to a large extent since losses are adjusted at replacement cost. Home insurance also covers other components and structures within the home ensuring losses are further mitigated.
• Home Insurance covers personal property including theft loss (money up to a certain limit, trophies, collectibles and several other valuables). This ensures a peace of mind for the home owner and their family and preserves years of hard work and toil.
• In case the home was being rented, the home insurance provides a reasonable rental value payout, further covering the risk for the owner.
• It also covers and pays for a clean-up of waste and debris in the event of a risk like volcano, fire or vandalism.
• When one takes up a home insurance cover, there is peace of mind knowing that everything is under control. In these rather economic hard times, there is need to have that peace in a home.
• Home insurance in many cases is mandatory requirement of a financial institution, if they are funding you or if you use the home for generating extra cash.
Dimitar Yoldov is an article writer interested in personal finance and the optimal way to live frugally but safely. He’s been living in Denmark for 2 years, and first got into personal finance by reading about indboforsikring (the Danish term for home insurance)