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Home insurance (or home owner's insurance) is a type of property insurance. One's residence or home, including all its contents, is within the category of home insurance. The cost an insurer pays for a homeowners insurance policy is determined by taking into account the replacement cost of the home along with all of the home's contents.
These values are normally determined by the value of the home as dictated by the property market and what amount similar homes sell for in that area. Different cities or countries will determine this value differently.
A home insurance policy generally remains active over a specific time period, during which the insured has to pay premiums, i.e. money paid towards insurance costs every term, to the insurer (usually the insurance company).
However, home insurance that is not contracted over a fixed time period may also be obtained by the insured and is called perpetual insurance.
Home Insurance: Cost of Premiums
The amount to be paid towards premium depends largely on the vulnerability of the home that is insured. The more susceptible the home, the larger are its premiums. In other words, a home in an area with many or frequent natural disasters may be very costly to insure. For example, insuring a house on a beach cliff that is quickly eroding may be a very expensive proposition. In an extreme case, insurance companies may not insure it at all.
Home Insurance: Different Contingencies
In addition to home insurance including the home and all its contents, it can also cover against any or all of the following:
- fire or lightning and smoke
- storms of all kinds
- riots or civil commotion
- breakage of glass
- vandalism, hooliganism and vindictive mischief
Understanding Home Insurance
Here is some information to help you understand home insurance better:
- Home insurance company: Rates charged by home insurance companies generally differ from one to another. They offer different types of policies, for different degrees of coverage, and operate in different countries and regions. Find different rates charged by various home insurance companies, and how their products differ.
- Home insurance coverage: Home insurance coverage mainly covers one's residential home with all of its contents. Get detailed information on home insurance coverage.
- Home insurance brokers: Home insurance brokers generally act as a medium between the ultimate customers and the home insurance companies. Know more about home insurance brokers before making a purchase.
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