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Home insurance for home owners, bare essentials.

Choosing your home insurance policy can be the most important decision you make related to your home. Choose well and you are protected from the most likely disasters that can hit your home. Choose badly and your home and property could be wiped away. Having suitable home insurance is not just a matter of protecting what you have from damage but protecting you and your home from civil or criminal lawsuits by people who are hurt in your property or by your our your pets actions.

Home insurance is a package policy. It combines both protection to damage to your property and for any liability you are accountable for. Getting insurance for legal liability is vital as you can lose everything you own from a stupid liability settlement. Be smart and provide your home with the insurance it deserves.

Most disasters are covered by home insurance, however many policies do not cover earthquakes and floods. Lack of maintenance related disasters are the responsibility of the owner. If you feel you need insurance for floods, earthuake and so on you will need to buy an extra policy for earthquakes and one for floods.

Home insurance policies cover four main aspects of your home:

- Structural damage to the structure of your property. This will cover any damage caused by events included in your insurance policy. For example structural damage caused by an act of terrorism will not be covered.

- Personal property. Any electrical goods, furniture or even cash(to a certain limit) can be covered by the personal property house insurance. However this coverage has it’s limits and will not cover very expensive possessions like jewelry and antiques might not be insured. This will mean you will have to contract extra insurance to protect your investment.

- Liability protection. One of the consequences of living in a blame culture, where there is always someone to blame and make pay is that insurance must cover all walks of life and security. This will cover any damage your pets cause or damages to other ’s property due to your mistake or negligence.

- Additional living expenses if you are left without a house or are forced to incur in extra money while waiting to replace the things lost.

There is a vast variety of house insurance types. In the states these insurance types are described as HO-1, HO-2, etc… HO-1 being the most basic bare bones version that has been outlawed in many states. This insurance only covers the first 10 natural disasters.

HO-3 is the most popular providing insurance for all disasters except those specifically excluded. It is your job to risk assess your situation as home owners and how much you can afford not to insure your home.

Even if you have an older home you can get a HO-8 insurance policy that will protect you from most eventualities in homes and especially old homes.

How much home insurance cover is enough?

Knowing how much you should spend protecting your assets when you might never have to use the insurance is an interesting question. Obviously you should get as much insurance as you can afford, but when does it start getting ridiculous. For instance would it make sense paying a 500$ a year on the insurance of a car that is worth 1000$? Probably not. The same applies to homes, you want to have enough cover so that you don’t face insurmountable losses in the case of an accident but you don’t want it to be your main expense. This article will cover the main areas a good home insurance should include and some practical help on how to decide how much to spend.

A good home insurance should cover these four basic points:

a) The structural components of the building.

b) Your personal belongings, furniture, jewls, electronics and other hardware in the house.

c) The living expenses and miscellaneous bills that need to be paid after a serious home accident.

d) Your liability to others.

Let’s have a look at these factors seperately.

The structural components of the building. Good home insurance will allow you to at least rebuild your home in case it is destroyed by some accident or natural disaster. This part of the coverage must be substantial as the costs of rebuilding after extensive damage can be very high.

Have a good look at the cover your insurance provides under so called acts of God. This and other loopholes help insurance companies to try and wriggle out of the responsibility of honoring an insurance policy.

Your personal belongings. If you suffer an accident or natural disaster you don’t want the loss of your personal belongings to be added to the list of things you loose. Especially if you have expensive equipment, jewels or art work you must make sure you have sufficient cover for the assets you store in your home.

Living expenses in case of an accident that would not allow you to stay at home.

It is important to make sure you will have enough to pay for a hotel, good medical care and all the necessary cash and equipment to get you by after you file an insurance claim.

Your liability to others. This is probably the most important section of your home insurance. If you don’t have any insurance for damages you suffer, probably the worst thing that can happen is that you lose everything but liability to others could send you to bankruptcy faster than you could say Jack Robinson.

Be smart, before you choose your car insurance, think about your circumstances, the risks you take and the price of the goods you wish to protect. Remember that time spent planning and thinking now could save your life in the future. Knowing how much you really need will help you avoid stress and wasted time in the future.