Home Insurance 101:

 

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Owning your dream home requires a lot of cash/investment and commitment for many years. You have to take the mortgage, buy furniture and other valuables to give your home and elegant look. Home ownership is one of our biggest and most valuable investments. But how often do we think to insure our homes against unforeseen perils that are beyond our control?

Disasters occur every day in life, and your property might get destroyed thus, bring down all that you have tirelessly worked for many years. Therefore, that’s why homeowners insurance is important as it will guarantee coverage to your home investments and give you a peace of mind.
What is home insurance?
It refers to a property insurance cover that homeowners buy to protect an individual‘s home and properties in it against unforeseen disasters/damages. Homeowners insurance will, therefore, cover for damages caused to your property plus any other liability or legal responsibility such as accident that might occur in your home or property.
Categories of covered properties
In most cases, the covered assets under homeowners’ insurance cover are divided into four categories. The properties covered in each class may vary depending on the region and the insurance company. Thus, it is always advisable to understand precisely the list of covered properties in your preferred policy.
Physical dwelling- It refers to the structure of the house which is covered by the policy.
Close structures- They are the structures constructed near the house or they are connected to the house either by fence or any other connection. They are separate from the house and may include structures such as garage or animal food store.
Personal property- They are your belongings which range from furniture, clothing, electronic appliances among others. It should be noted that personal properties such as money, jewelry and art have limited or no coverage for loss.
Loss of use-The policy covers for any additional expenses in case a covered peril damages your house, and it becomes uninhabitable. The policy will cater for expenses that will ensure that you are compensation to the normal situation.

Related: 4 Benefits of Investing in Real Estate
Importance of homeowners insurance
1. It provides coverage for the Home Structure:
Homeowners’ insurance policy guarantees you the rebuild of your home’s structure in case the peril is covered under the insurance policy. The amount of money repaid to cater for the reconstruction depends on the policy agreement and the premiums. When you have homeowners insurance, the company will take care of the finances needed to rebuild the home’s structure.
2. Covers property damage
Homeowners insurance also covers for your personal properties. The policy provider will list the items covered under each category. In case of peril, the company will replace your valuables as per the policy contract.
3. Covers for liabilities
Homeowners insurance will provide compensation for any liabilities that might occur on your property. The policy covers issues to do with accident that you may experience either as the homeowner, family member or injuries that a third-party gets on your property.
4. It boosts the mortgage lender’s confidence
For you to qualify for a home mortgage, the lender must ensure that your home is protected from any unforeseen peril. Thus, taking homeowners insurance policy cover will boost lender’s confidence as their finances are protected. Home insurance is one of the requirements for you to qualify for a mortgage.

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