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What is A Home Insurance

There is no place like home. Home is not only place where you rest at night, but it’s also place that houses everything you own. Long time ago, home was the best safety measure you can invest in to help protect your belongings. But, these days homeowners are vulnerable to the risk of property theft, damage, and loss. Therefore, home insurance is one of the best means to make sure that your property is protected in the event of an emergency.

A Home Insurance, also sometimes called homeowner’s insurance is a type of property insurance that covers a private residence. It’s basically an insurance policy that combines different personal insurance protections which can include:

  • Losses occurring to one’s home, its contents, loss of use (additional living expenses),
  • Loss of other personal belongings of the homeowner.
  • Liability insurance for accidents that can happen at the home or at the hands of the homeowner.

Furthermore, home insurance provides financial protection against disasters. A standard home insurance policy insures the home itself along with its contents.

Imagine coming back from work and your house looks like this (see picture below),if you don’t have a home insurance what would you do?See how important a home insurance is?

House fire-Home insurance
House Fire

Home Insurance policy referred to multiple-line insurance policy. This means that it includes both liability coverage and property insurance with a single premium paid for all risks. This means the home insurance covers both damage to property and liability for any injuries and property damage caused by the owner or members of his/her family.

Home insurance costs often depend on what it would cost to replace the house and which additional things are attached to the insurance policy. An insurance policy is a legal contract between an insurance company and the insured.

Depending on the insurance company, the cover can also extend to include other structures like your garages, greenhouses and swimming pools, as well as permanent fixtures around your house like baths, toilets and fitted kitchens.

Is Home Insurance Compulsory?

There’s no law that makes home insurance compulsory, but most banks make it an obligatory requirement for homeowners who need home loans. When one applies for a home loan, the bank will request that they take out a comprehensive insurance policy to the value of their home. The reason for this is to protect the homeowner and of course the bank from the risk of structural damage to your property. This doesn’t mean you have to take the home insurance that your bank offers,but proving that you do have the cover in place is important should your home be financed through a bank.

Mortgage providers make home insurance compulsory, but remember that other property-related insurance policies, like Home Contents Insurance or Personal Valuables Insurance are not compulsory. Insurance cover on your property is important as you may not always have extra funds to cover the costs of rebuilding your home, should something unforeseen occur.

Why Home Insurance Is Important?

Besides financial protection, there are many other advantages of having a home insurance:

  • Should your house get damaged, you can get repairs done in a short period of time.
  • If you have an emergency covered loss, home insurance will provide emergency repair services to protect and prevent your home from further damages.
  • If you can’t live in your home because of a mandatory evacuation, your insurance policy will usually cover your temporary living expenses.
  • Some home insurance companies also offer a no-claim rewards incentive where homeowners can reclaim cash back after a specified number of premiums are paid.

Related Articles:Risks of Not Having Homeowners Insurance

Basic things banks look out for when assessing a home loan application

3 Reasons Why You Need Homeowners Insurance

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