INSURANCES

WHAT IS HOME INSURANCE AND WHY DO YOU NEED IT?

3 AUGUST 2017

Buying your dream house is one of the major events of all your life. It is also a big investment, so you have to be aware of all the dangers which can damage your property. It's crucial to protect it with a proper insurance policy. What are the types of home insurances and what do they cover?

What Is a Homeowners Insurance?

Home insurance, which is also called homeowners insurance, is a property insurance that covers private residence. A regular policy protects a house itself and all of the detached structures in it. Your personal belongings, such as jewellery, furniture or computers, are also protected.

Homeowners insurance provides you with compensation in case of fire, damage or theft. It also provides liability coverage against accidents on the property.

What Is Covered By a Standard Homeowners Insurance Policy?

A standard insurance policy includes:

Protection Of the Structure Of Your Home

You can count on money to repair or rebuild your home if it's damaged or destroyed by: fire, hail, lightning, hurricane or any other disaster which is listed in your policy. Most policies protect also detached structures of the house (like a garage) and all the property.

Personal Belongings Protection

Your personal items: clothes, jewellery, furniture, sports equipment, and many others, are also insured in case they are destroyed or stolen. In case of expensive items, there are usually some limits, but you can purchase a special policy to cover the full value of these things.

Trees and plants on your property are also insured by the standard policy. They are not covered for damage caused by wind or disease.

Liability Protection

You're insured against bodily injuries or property damages that you or your family members cause to other people. It also includes damages caused by pets.

Additional Living Expense (ALE)

ALE provides you with money for additional living expenses in case your house is destroyed and it cannot be inhabited. It covers many costs, like hotel bills or meals in the restaurant, but it has some limits.

Things That May Not Be Covered By a Home Insurance

Damage caused by most disasters is covered by regular policies, but there are exceptions.

You have to buy two separate policies for flood and earthquake damages. If you live in an area prone to flooding, you need a flood insurance. In case of earthquakes, it works the same way. Ask your agent about the earthquake risk in the area that you live in and make a right decision. Also, damages caused by poor maintenance are not covered by the insurance.

There are also some other things that may not be covered by the standard homeowners policy:

  • mold
  • termite infestation
  • sinkholes
  • leaking pipes
  • blocked drains
  • sewer backups
  • nuclear plant accidents

For these you need to ask for additional policy.

When You Can't Count On a Compensation?

Your insurer won't pay you the compensation is some cases.

You can't count on the money when damages occurred as a result of deliberate action or your own negligence. Your insurance provider also won't accept your complaint when a damage is caused as a result of regular usage.

Purchasing a Home Insurance

The first thing you should take into consideration is the coverage of the insurance. Maybe the basic coverage will be enough for you, but it is always better to look for a wider offer. Of course, wider coverage generates higher costs of the policy.

At an early stage of your insurance request, an insurance provider can ask you many questions about your property in order to define all of the risks related to the location of the property. Risk assessment has a major influence in determining an insurance premium.

After receiving an agreement, you should read it carefully. Pay attention to mentioned coverage and risks. Seemingly wide coverage may not contain the risks that you count on.

Finally, after signing the proper agreement, you receive your policy. A policy is a confirmation of obtaining an insurance. It should include: your personal data, data about your property, information about an insurance company.


If you have a house, buying a proper insurance is a must. Analyze all the risks, compare available offers and decide on the best insurance for your home. And remember: when deciding on the policy, always purchase enough coverage to be able to rebuild your home after it's destroyed.


Author: Olga Gierszal

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