Home Insurance – Do You Need It?

Having your own home is totally liberating. Most of the time, your home acquisition is a living testimony of your hard work and perseverance. Now that you have secured your lifetime abode, have you taken all precautions to safeguard it? Simply locking your door does not guarantee your home’s security.

Getting a house insurance policy is a crucial step in protecting your home. Most of us don’t understand how important it is to get home insurance until it’s too late. There are several other variables that are out of your control! Here’s a beginner’s guide to home insurance if you’re unfamiliar with the notion.

 

What is Home Insurance?

A Home Insurance Policy is a type of property insurance that protects a person’s home and personal belongings from loss and damage. Interior and exterior damage, loss or damage to personal goods, and injury that happens while on the property are generally covered by the policy.

 

Why Is A Home Insurance Policy Important?

Coverage Against Natural and Man-Made Disasters

Natural calamities like floods, cyclones, and earthquakes can cause significant property damage and possible fatalities. A house insurance coverage will cover the loss or damage to your home due to such events. Aside from natural disasters, it also covers damages caused by man-made risks like fire, theft, and vandalism. It could also cover assets like clothes, ornaments, appliances, furniture, and so on, on top of the home’s overall construction.

Personal Property Coverage

Home insurance does more than just protect your property from disaster. Depending on what insurance you get (more about that later), it may also cover personal goods. Personal property protection could help you in repairing or replacing things that are stolen, burnt to a crisp, or whatever unfortunate event that your insurance covers. Of course, the items covered have to be inside the home.

Many insurance agencies provide add-on coverages that can help protect your belongings even more. For example, items that are more expensive than usual, like jewelry, watches, or even clothes made with exotic material, could warrant extended coverage.

Safeguarding Against Liability

A house insurance policy also protects you from any liability that may arise as a result of accidental damage to a third-party member while on your property. By purchasing a personal umbrella policy, you may be able to improve your liability coverage limits. Your agent will be able to explain the various options open to you.

Liability coverage is included in most homeowners’ insurance policies in the event that someone who is not a family member gets badly hurt on your property. What does “hurt” mean, you say? Think someone rolling down the stairs because one of the planks was broken. If you’re determined to be at fault, bodily injury liability coverage may assist in paying for your legal expenditures as well as the visitor’s medical bills.

 

Which Home Insurance Policy Do You Actually Need?

Basic Home Insurance (HO-1)

This basic home insurance policy has become less frequent in recent years, as most lenders believe it does not provide adequate coverage for properties. Basic Home Insurance just protects the structure of your home. Sure, the structure home is insured, but ONLY the structure, not the stuff and people it serves to protect.

 

Broad Form Insurance (HO-2)

It covers damages to water and gas pipes, electrical accidents, overflows, and tunnel cracks. This type of insurance is uncommon, and lenders rarely recommend it because it does not cover liability due to the high costs of medical accountabilities and legal bills that frequently emerge from an injury occurring on the premises. Not only that, but it also doesn’t cover the costs of the lawsuits that come with it.

 

Special Homes Insurance (HO-3)

Special form insurance is the most preferred home insurance. It covers your home, your belongings, and your responsibility. Your insurance provider will cover the cost of repairing or replacing your house’s structure, personal items, and any expenses linked to injuries that occur at your home. This stands up for bodily injuries to both the residents and the visitors and legal protection should there be a lawsuit.

 

Renters Insurance (HO-4)

Renters’ insurance policies are designed exclusively for renters who need personal property and liability coverage but aren’t covered on their residence. Renters insurance often provides the same disaster coverage as a basic or comprehensive type and can even assist you in paying for housing if you’re kicked out of the rental due to unforeseen circumstances. 

 

Comprehensive Home Insurance (HO-5)

Comprehensive insurance is often only considered for brand-new homes, despite the fact that not all insurance carriers offer it. This open policy provides more coverage than the special version. Earthquakes, floods, and nuclear damage are often excluded. There are also bigger limits for personal properties and liability coverage to choose from.

 

Condo Insurance (HO-6)

If you can’t tell by the name, a condo insurance policy is for condominiums. It protects the structure, contents, and the owner’s personal liabilities. Damages from airborne or land-based vehicles, explosions, fire, hail, natural calamities, riots or commotion, theft, vandalism, and storms are all covered under a specific hazard policy for condo insurance.

 

Mobile Homes Insurance (HO-7)

It has identical coverage to that of the special home insurance. However, this is specific for mobile homes instead of single-family homes. (Again, as its name suggests.) It covers damages similar to that of the condo home insurance policy.

 

Significant Home Insurance (HO-8)

An old or significant home insurance policy provides more comprehensive coverage for older and historically significant homes that require more repairs and have higher replacement and repair expenses. This policy covers all types of damage, including coverage for your home, goods, and liability.

Now, Do You Indeed Need Home Insurance?

You don’t know what tomorrow brings. Regret comes after a nasty incident, so you better be ahead of the game. Home insurance covers the costs of damages to your home and valuables, as well as injuries to individuals who get hurt on your property.

 

 

Do you have an extra property that seems to act as a liability instead of an asset? Why not turn it into cash? You can start with us, Shorefront Investments! We’re Florida-based real estate investors looking to buy and sell properties fast. You can contact us by giving us a call at (850) 713-4866, sending us an email, or filling a form on our front page.