A Quick Look at Home Insurance

Published by Sharekhan Education | October 5, 2021

Quick Look at Home Insurance

Isn’t your home your biggest asset and don’t you spend a lot of money to build and decorate it? If yes then surely you must have given a thought to the fact that any damage to the house or its contents can burn a hole in your pockets, right? How then do you plan to protect yourself from such financial losses? Unless you can afford to spend more to rebuild your home surely you will need to have some risk management strategy in place don’t you think?

Home insurance or Homeowners insurance as it is popularly known; is that risk management strategy or tool which typically compensates you for financial losses resulting from damages to your home or its contents.

To generalize the scope of this insurance cover we can say that it covers losses and/or damages to your

1. House: interior or exterior damage to the structure
2. Furnishings and other personal assets.
3. Injury that may arise while on the property.

This means that with a homeowners policy you can insure not only the contents of your home but also its structure and protect yourself against any liability arising out of accidental damages caused by you to a third party within the limits of your property. So if there is any damage to your house or its contents due to any manmade or natural calamities like theft, burglary or fire etc.., the insurance company will typically compensate the losses as per the terms of the contract.

Types of Policies:

Homeowners Policy comes in various variants covering different types of risks. Some policies provide comprehensive covers while others over specific risks. You need to opt for the one that will suite your needs the best. You can get homeowners insurance to cover personal belongings like furniture and electronics goods etc. This is applicable even if you are a tenant living in rented premises.

This policy also provides relief in case your home is deemed inhabitable due to severe damages. You can even get compensation for your temporary living expenses until your home is repaired or rebuilt.

To summarize we can say that your home is one of your most important financial assets and a home insurance policy is an ideal tool to protect your home and its contents. But do remember that you will not be compensated for any losses arising from willful destruction of the property or damages due to its wear and tear. It is advisable thus to proactively opt for the right policy and not wait for any calamities to remind you to do so.

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