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What is Home Insurance? Features and Benefits

Home insurance covers property damage expenses, a type of property.

Home insurance is also called homeowner’s insurance in other words. This policy protects your bungalow/apartment/rental flat/personal house against all possible risks. It covers the cost of monetary losses due to any untoward incident.

A home insurance claim can be made for damage caused due to the following reasons:

  1. This policy covers damage caused by natural calamities such as wind, hail, fire, or lightning.
  2. Covers damage caused by humanitarian issues such as riots, theft, vandalism, destruction of property, or civil commotion.
  3. Covers damage to a home caused by rail or road construction.
  4. It also covers if the home is damaged due to a collision with an aircraft or someone else’s vehicle.
  5. Home insurance covers your home even if the house is damaged in an explosion.

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Coverage offered under the home insurance policy:

A home insurance policy also covers many types of damages. For example, it also provides coverage for broken water pipes, damaged water lines, or damaged walls, floors, windows, and doors. It covers not only property but also damage to household items.

There are four types of loss expenses covered by a home policy:

  1. Internal damage costs.
  2. External damage costs.
  3. Loss of personal belongings from home.
  4. Coverage for bodily injuries that may occur from damaged property.

Different insurance policies provide different coverage depending on the coverage factors i.e. the type of residence is a rental or self-owned home or the size of the residence varies.

Other characteristics such as age, place of residence, and location also matter, as does the value of the goods. The history of your claim or the crime rate in the area also matters.

In the end, it is up to you what type of coverage you choose. The amount of premium and deductible will be your choice as to how you are willing to pay. The deductible is the amount you have to pay before making a claim.

Exemption process:

Although home insurance covers both natural and man-made causes, there are few accidents that are covered. For example, there is no coverage for intentional damages, negligent damages, war conditions, or ‘natural disasters’. These count as emissions.

Some of them are listed below:

  • ‘Natural disasters’ include disasters like floods and earthquakes but some providers may come up with additional coverage for these disasters in certain cases or customized policies.
  • No cover for damage caused by termites, rodents, or birds.
  • While some circumstances may cover damage caused by the explosion, it does not cover damage caused by industrial or agricultural operations.
  • If any damage is caused intentionally or accidentally by any member of the household. For example, a collision with one’s own vehicle will not be covered under a home insurance policy.
  • Any destruction of property under an ordinance of law or court order will not be covered under this insurance.
  • This insurance does not cover damage caused by nuclear hazards or war in the country.

Benefits:

why do you need to have home insurance?

Home insurance coverage is a good idea as it protects you from financial loss. The advantages of having house insurance are:

You can get financial assistance for repairs and damage control due to unfortunate events.
If a third party causes damage, you can make an insurance claim without getting into a legal dispute.

Getting a home loan for repair/reconstruction/extension is easy if the property is insured.
Expenses for damage to household goods and contents can also be covered.

Household items such as appliances, furnishings, furniture, gadgets, or jewelry
The coverage is not only for losses due to accidents or calamities but also due to theft, robbery, or burglary.

There are types of home insurance policies that are designed to meet specific needs. Homeowner’s insurance and renter’s insurance are included in these plans. Landlord insurance can be claimed when a tenant defaults on rent or causes any other damage. Conversely, a tenant can get insurance for their belongings in a rental flat.

How to make a home insurance claim?

You may need proof of the damage in the form of documentation to make a claim on your home insurance. Such as police FIRs, investigation reports, fire department statements, housing societies, etc. Further, if necessary, a medical certificate of death or disability. In addition, you may need an invoice or other form of proof of ownership in court.

You must pay the deductible to make a home insurance claim. The amount of insurance you get will depend on the type of policy you have. It depends on whether your coverage provision will be based on the original cash value or the replacement value. This is further explained below:

The current value of a home or household item is determined by the actual cash value. It reduces the original purchase price of the item due to defects. Consider, for example, an insured television that was damaged as a result of theft or robbery. The insurance amount will be paid based on the depreciated value of the TV at the time of claim.

Abstract:

In today’s unprecedented times, a home insurance policy has become a necessity. It is always a good idea to protect your property from unexpected damage. When choosing, it is important to see what expenses are covered You can take more than one insurance to get a discount. Although you can rent out the insured home, the home insurance policy will automatically be canceled if you sell the home.

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