Generally the policy which protects your home is called Home owners insurance policy. This policy is kind of an agreement that has been done in between you and an insurance company. There’s a clear statement that you will be paying a certain amount of money. The policy can be in monthly, every six months, annually or any how you agree upon the deed. In return, in the event of any loss or damage to your house, they would compensate you a predetermined amount. Not only that, the insurance company would also compensate a certain amount of money in case of any injury that is occurred on your property for which you are responsible. This policy is valid for a specific period of time as agreed according to the deed by both parties.
The basic home owner’s policy does not compensate if the damage is incurred by any natural disaster. To get the whole coverage package, you would need to buy an extra coverage to compensate you during the natural disaster. Nowadays most mortgagors would insist you to get a basic home owner’s insurance policy before starting any business with you. But in the reality, like I said earlier, it is not always enough to take out only the basic policy.
There are different types of coverage for home owner’s insurance policy.
- The basic home owner’s insurance policy covers only the damage or destruction to the home and property caused by any type of explosion, riots/civil unrest, fire/lighting, volcano eruptions, vehicles, aircraft, wind/hail, self destruction (part of the house falling on itself), theft, smoke and vandalism.
- Plan 2 compensates loss or damage to the house and property caused by all the disasters listed in number one along with water damage (dishwasher breaks, washing machine overflows), electrical power surge, snow damage (like snow falling trees).
- The third plan compensates like number 1 and 2 and also special items. This plan includes events of earthquakes, war and nuclear blasts and floods.
- Complete risk coverage: This plan only covers any loss and damage to the house and property. But you should always read and understand everything that is listed in the exclusion list.
- Renter’s insurance policy: The renter’s insurance policy covers only the property of the tenant in a house from the events listed in number 1 and 2.
- Eventually there are some special policies for homes with historical value. This type of insurance policy compensates with money for the disasters listed in number one. And is limited to remake or cash value of that enlisted items. But this insurance policy does not give compensation for rebuilding anything. Because maximum buildings are often times higher than the current market value.
- Condominium Insurance: Though this sounds apart from others. But Condominium insurance policy is mostly alike to the renters’ insurance policy.
Though the all the plans come with variation, but most of them depend on the insurance company and the basic needs of the person. Who is buying the homeowner’s renter’s insurance policy.
Lastly one thing need to say that to get the best out of your home owners insurance policy. You need to check out the quotes carefully from different insurance companies. Also, you have to compare prices and services among them. This way, you can be able to get best one for you at an affordable price.