Property Insurance Types and Coverage

Getting a new home, paying monthly mortgages, and setting up the rooms and furnishing can be a joy. The home you live in is most often the single most valuable thing in your possession. Apart from the house itself, everything contained inside it are also of great monetary and sentimental value to you. There are, however, looming risks that can be damaging and expensive. A home can face a whole range of threats that can involve a great deal of money to repair and restore. There can be damage done by nature, by negligence, or by accident, and there can also be acts of vandalism or theft. There is a clear need for insurance.

Property insurance

Homeowner’s or property insurance is an agreement that promises to cover for losses that may happen as a result of damage to your home. You will have to pay premiums to an insurance provider periodically. Should you happen to incur damage caused by a covered calamity, the provider will pay a settlement amount that will cover all costs required to bring the damaged property to its former condition either by repairing it or by replacement. This is the basis for any property insurance.

Insurance coverage

Any basic policy will normally insure against a lot of damages. This includes—Hail, falling objects like trees, wind damages, lightning strikes, theft, and failing systems like electricity and plumbing. These damages are the most common causes of insurance claims, and this is also a very bare and basic policy. There are some kinds of damages that will not be covered. These are normally area specific and need to be purchased either as a separate insurance policy or as an add on to the existing policy. They are more precise in what they cover and will be explicitly mentioned as exclusions. If your home should get damaged by an excluded calamity, the company will not pay out.

Exclusions

These are damages that are not common to all parts of the country, and so are not part of the broad plan. For example, there is no need for a landslide cover for someone who lives on the plains. Similarly, there will be no cover for water damage for those living in arid areas.

  • Earthquake damages: Earthquakes are not normally part of standard insurance policies. Not every region is vulnerable to earthquakes, but if your area is on or near a fault line, it is wise to get covered against them.
  • War and terrorism: This is usually not covered by private insurers. War and terrorism insurance is normally handled by the government as relief measures.
  • Water damage: Damage by water caused by heavy rains, floods, and any other incidents are not generally covered.
  • Neglect: If the home or property was damaged due to negligence on the part of the owner, the damages will not be covered. For example, if there is an insect infestation caused by not cleaning the yard and they eat into the house, it will not be covered.
  • Criminal activity: Insurance clauses are clear about ‘not using products for their intended purposes,’ and this can be compared to houses, as well. They are meant to be lived in and not used as a base for criminal activities.

Insuring your home is a major part of planning and caring for your property. It is also the first step towards management of risk. This is because it is nearly impossible to know when a damage will happen, and some incidents can’t be prevented.