What is Home Insurance?

What is Home Insurance?

Homeowners insurance is a packaged insurance policy that covers property damage and liability for any injury and damage caused by a family member. Also, it includes damages caused by household pets. Although a standard policy insures damages caused by most disasters, there are some exceptions. For example, a standard policy may not cover for damages caused by an earthquake, floods, and poor maintenance.
Therefore, homeowners are required to buy two separate policies for natural calamities such as earthquake and floods coverage. In the event of a loss, home insurance insures a policyholder against property damage and liability for damage. For example, the insurance policy pays for damages caused when a fire destroys your home; a tree falls on your roof, or a friend gets injured while slipping on your rug.

Perils covered by home insurance

A standard homeowner insurance policy covers the following hazards:

Power outage

Homeowner policy covers damages or losses for power outage if the outage did not originate on your property and was not general and widespread.

Fire

According to Loretta Worters, the spokesman of Insurance Information Institute, fire damage claims are the costliest. The average cost of fire claim is approximate $40,000. Nonetheless, fire claims come fifth after wind and hail, property damage, theft, and water damage and freezing.

Wind or hail

As weather events become more frequent and severe, wind-related claims have become common and costly insurance claims. According to Youi Home Insurance Information Institute, wind-related claims in 2014 doubled the average claims for the previous 20 years. https://www.youi.com.au/home-insurance/contents-insurance

Theft

A standard home insurance provides protection against theft of tangible personal property such as household furniture. However, there are limits on reimbursement for gold, silver, and bank notes. Also, some common personal property such as animals, property belonging to tenants, and motor vehicles are often excluded in a standard homeowner policy.

Tips for buying home insurance

Homeowners’ are encouraged to compare home insurance coverage options and rates before making a claim. Visit www.insurance.com to learn how to determine your coverage needs and save on your policy. Consider future changes that might increase or decrease your risk profile before buying homeowner insurance.