Home insurance basics: What you need to know?
Home buying is one of the major financial decisions in your life. Therefore, you should take every step to ensure that your house and its contents are protected from any unforeseen circumstance. A home insurance policy provides liability and financial protection for your house and its precious possessions. It is also referred to as hazard insurance or homeowners insurance.
Types of coverage offered by home insurance:
A standard home insurance policy offers specific coverage as discussed below.
1. Liability protection
Liability protection is sub divided into 2 parts – personal liability and medical treatments. They are discussed below in details.
(a). Personal liability: It covers lawsuits that may result if you, your family members or your pet are responsible for any damage caused to any third party.
(b). Medical treatments: If someone gets injured on your home, then standard homeowners insurance pays for the required medical treatment.
2. Property protection
It is probably the primary purpose for which you need homeowners insurance. Property protection coverage is divided into several parts as discussed below.
(a). Structures of your home: A standard home insurance policy provides coverage to the primary as well as the detached structures of your house. As for example, along with covering built-in appliances, air conditioning systems and electrical wiring, the insurance policy also covers detached structures like the garages, patios and driveways. However, the detached structures those are used for business purposes are not covered under personal home insurance.
(b). Personal possessions: A homeowners insurance policy also covers your valuable possessions. Therefore, you’ll get coverage for your expensive jewelry, clothes, furniture, etc. along with your personal items that get stolen or damaged by fire or natural disasters that are listed under your policy.
Apart from above, it also covers your living expenses if you’re not able to stay at your home for some repair work. Your insurance policy will also cover your living cost if any government order restricts you from entering your home.
Tips to purchase home insurance:
Here are some tips that will help you to purchase adequate coverage at affordable cost.
• Buy adequate coverage on the basis of the replacement cost of your home.
• Shop around and compare rates before buying an insurance policy.
• Verify company’s financial history before purchasing a policy.
• Purchase multiple insurance policies from the same insurer.
• Install home security devices to get discounts on your policy.
It is advisable that you verify the claim resolution record of the company from which you’re planning to purchase your home insurance policy. In this way, you can save yourself from facing any trouble at the time of settling a home insurance claim.