Home Insurance

Overview

Home insurance is a specific type of insurance that gives coverage to a person for his/her home and its contents. Home insurance is sometimes also referred to as hazard insurance. It includes liability insurance as well, because if a person has an accident while on the insured property, there may be financial insurance coverage for the accident too. A home insurance policy is a lengthy document that spells out in detail what things are covered and what things are not covered by the home insurance. Homeowners' insurance normally covers the replacement cost of the home, and may have other "riders," or elements that provide additional coverage. These riders are attached to the policy, and result in an additional premium charge, but they provide additional insurance coverage beyond the basic home insurance policy. Often nuclear explosions, earthquakes, floods may be excluded from protection and will have to be purchased separately.

How It Works

You can contact an insurance agent or go to the insurance company for procuring a home insurance policy. Based on your requirements, you can choose an appropriate kind of home insurance that will cover all your needs. Usually in the United States when someone wants to build a house, they take a mortgage loan. To protect both the financing bank or the lender and the homeowner, the home needs to be insured. Each company offers a different home insurance policy. The typical home insurance policy has many factors that influence what you will have to pay for a policy. Go through the policy document to find out what items have been covered under the insurance policy before you fill out any paperwork.

Benefits

One of the biggest benefits of having a home insurance is that your investment is protected. It protects you and your personal belongings besides providing liability coverage. The home insurance policy also covers you in case of theft of your personal belongings.

Cost/Pricing

You can insure your house for its replacement value. This makes sure that in case of any damage the house can be replaced. The total value of the house will determine your premium amount, interest and monthly payments. You can reduce the premium amount by installing sprinkler systems, burglar alarms and fire extinguishers in your house. You can choose to have a higher deductible and lower premium, but this may prove difficult in case of an accident, as you will have to pay more money initially before the insurance company pays the amount.

Timing

Ideally, you should go in for a home insurance when you have purchased a house or built one. Compare different companies before you zero in on one.

Companies/Industries

Many large insurance companies sell home insurance policies, and they cover the loss of the home, and other events that are likely to cause damage to the house, its possessions, or its occupants. Allstate Insurance Company, AIG Insurance, HSBC, and ACE Group are some of the widely known and well-respected insurance companies that offer home insurance.