Your home is the most valuable asset to you, so you must protect it from any man-made or natural hazards. To get financial coverage against any disaster caused to your home, you need to buy home insurance.
Importance of insuring your home
If you buy home insurance, you can enjoy several benefits. A home insurance policy also cover you against expenses caused due to damage or injury caused by your pets to some other person’s property or if you and your family members cause damage to other people’s properties. It not only gives protection to your home, but, it also protects the contents of your home, if it suffers due to the following reasons:
* Lightning
* Theft
* Snow
* Ice
* Fire
* Frozen pipes
* Windstorm and hail
* Smoke
* Vandalism
* Overflow from plumbing
* Accidental electric damage to appliances
* Falling objects
You need to pay insurance premiums according to the terms and conditions of the policy, which can be monthly, quarterly, half-yearly or yearly. However, there are some policies which do not cover damage caused by:
* Flood
* War
* Nuclear fallout
* Earthquake
* Terrorist acts
Factors that affect your insurance premium
While calculating the amount of premium you need to pay towards your policy, the insurance companies take into account the following factors:
* Your residential area: The amount of your premium amount depends on the type of area where you stay. If you live in such a place where the number of theft is very high, you need to pay a higher amount of premium. If you stay in a place where there is more chance of earthquake, your premium amount will also rise.
* Type of coverage: If you take a tenant insurance policy, your premium will be less than that of a condominium owner’s policy.
* Amount of coverage: If you purchase more coverage, your premium amount will be more.
* Security features installed: If you have installed security features like, smoke detectors, burglar alarm, etc, in your house, your premium amount will be lower.
* Amount of deductibles: If you pay a higher deductible, the amount of your premium will be lower.
Types of coverage and their features
The main types of coverage offered by an insurance company are:
1. HO-1: This is the basic type of coverage that protects your house and the property inside it, from damages caused due to fire, lightning, hail, riot, vandalism, theft, vehicles, etc.
2. HO-2: In addition to the coverage given by HO1 type, it gives some additional protection from damages caused due to falling objects, electrical surges, snow, freezing of water, etc.
3. HO-3: This is a special type of coverage, which gives your home, your personal possession and any detached structure of your home protection from any natural calamity like, flood, tornado, earthquake, war, nuclear accident, etc.
4. HO-4: This coverage is for tenants and gives protection to the tenant’s household and personal belongings against the disasters and damaged mentioned in HO2.
5. HO-6: This coverage is for condominium owners. It gives your condo protection against all damages described in HO2.
6. HO-8: This policy is for those owners, whose home falls under the older home category and has some historic value. This policy provides cost for the repair of the home and the items insured.
Your home is the most valuable investment made by you, so, you should guard your home against all kinds of vulnerability with the right home insurance policy.