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.

Home insurance, what’s insured and what is not?

What is your most precious possession? Depending on your definition of possession you might have answered your family, your wife, your children, your house, your car or your motorbike. Protecting what you treasure is part of human instinct. We don’t need to tell you to take care of your family but you might be failing to protect your most precious material asset, your home.

But I have insurance I hear you complain. Is your insurance suitable? Do you understand what it covers and what it doesn’t? What are your deductibles and your coverage limits? Understanding these and other factors of your insurance can mean the difference between a bad day and a financial ruin. If you have suitable insurance you can bounce right back from an unforeseen occurrence that affects your home, without it you could end destitute and with a massive mortgage to pay and nothing to show for it.

So what does your home insurance likely cover? And what doesn’t it?

1) Damage to your home by fire, lightning, theft, water and snow. These are the basics but can vary depending on where you live and your personal choice. In Nicaragua for example insurance often covers for earthquakes, volcanoes and hurricanes, but there is little need for coverage for damage from snow. Don’t assume your insurance is coverage for your area. Often “basic” insurance templates are sold with little attention to the personal needs of the policy holder.

In most insurances there is no coverage for earthquakes, acts of war and terrorism and floods. If you feel you might be at risk from these or other disasters plan ahead and get them included in your home insurance policy.

2) Your home insurance will likely cover damage and loss of your home contents, like furniture, electrical goods, etc… Please note that it will not cover luxury items or high cost goods like diamond rings, sport cars or property from your work or belonging to some0ne else. If you own expensive goods that stay in your house it is worth getting specific insurance for these items. These specific insurance policies are called floaters and are add-ons to your main house insurance.

3) You are also liable for any damage incurred by people while in your house. Even thieves that enter your property are able to sue you for negligence so it is worth making sure you are insured for injury liability. However even though most house insurance policies include some injury liability coverage it is rarely enough. If you feel that this or any other aspect of your insurance needs a special boost don’t think twice and get an umbrella insurance to raise your insurance limits.