Introduction to home insurance Why do you need home insurance? Your house is your most cherished possesion and your largest asset. Your home insurance guards your most cherished goods: your home, your personal possessions and even your financial future.
What is home insurance? The home insurance policy is usually a term policy—a policy that is in effect for a fixed period of time. The home insurance payment the insured makes to the insurer is called a premium. The insured must pay the insurer the premium for their home insurance each term. Most insurers charge a lower premium for home insurance if it appears less likely the home will be damaged or destroyed: for example, if the house is next to a fire station, or if the house is equipped with alarms and sprinklers.
How does home insurance protect you? Your home insurance usually guards you in two ways: financial loss and personal liability. Financial Loss: Your home insurance will reimburse you if your home or personal possessions are stolen or if any other a sudden situation that is specified under your property insurance policy occurs. If a sudden situation, like a fire, does arise, your home and garage will likely need to be restored. You will be reimbursed for the value of items, such as furniture, cameras and computers—or the items themselves will be replaced. If you cannot live in your home while it is being restored after a loss, your house insurance will pay for some of your supplementary living expenses, such as accommodations, restaurant meals and storage. Personal Liability: If someone is injured while visiting your home, they could sue you for damages. If they win and a court awards them a copious settlement, you could be financially ruined. Your wages could be garnished and you could have a hard time getting back on solid ground. Property insurance guards against this kind of liability. Your home insurance will also protect you against liability for accidental damage to someone else’s property. For example, if you live in an apartment building and your bathtub overflows, resulting in damage to your neighbour’s apartment, your home insurance will pay for repairs or replacement. If you rent your home or own a condo unit, you might feel that investing in a home insurance quote is needless. If you are just starting out and renting your first place, you might believe that you have nothing of real value that needs replacing should something like a fire occur. If you own a condo unit, you might believe that your condo corporation’s home insurance policy has you covered. Here is why whether you rent or own a condo, purchasing a home insurance policy is a good move.
Whether you make your home in a house, a condo, or a rental unit, the best way to protect it, your possessions and your liability is to purchase home insurance. One thing to keep in mind when shopping around for a home insurance quote—there is no such thing as a “standard” home insurance policy. Home insurance coverage varies significantly from one insurer to another. Companies that sell home insurance compete for business on coverage, service and price.
