Homeowner Insurance

November 21, 2009

Are we all familiar with the term insurance? In Economics, insurance is defined as a form of risk management which is used to protect against the risk of contingent loss. With the passage of time, different insurance companies have successfully established a strong foothold in the insurance market. These insurance companies are offering different types of insurance to their clients based on their needs. Some of the common types of insurance offered by them include home insurance, property insurance, auto insurance, health insurance, and life insurance, to name a few. Among these, homeowner insurance or home insurance and property insurance are gaining significant momentum among people apart from the other types of insurance. So if you are planning to buy a home or a property or already have one, then be sure to insure it against any type of contingent loss. However, if you are still not aware of what exactly is property insurance and homeowner insurance, then just put an end to your worries and simply have a look.


• Property insurance: This insurance compensates you for the insured property in case it gets damaged by natural calamities, theft, vandalism or fire. There are different forms of insurance that are included in property insurance, namely, earthquake insurance, fire insurance, boiler insurance and flood insurance. Property insurance can be acquired in two ways, namely, Named Perils and Open Perils. While the former insurance provides coverage for events causing damage that are listed in the policy documents, the latter insurance covers losses that are not specifically mentioned in the policy document. For instance, consider that your property has been damaged by earthquake and the causes mentioned in the policy document are burglary and fire and not earthquake. Then you can claim for the damages caused by earthquake under Open Perils and not under Named Perils.


• Home insurance: A home insurance or house insurance is an insurance that offers you compensation for damage of your home from any type of disaster. However, in certain geographical regions, the standard home insurance policy does not include some types of disasters like earthquakes and floods and to protect your home against these natural calamities, an additional coverage is required. On the other hand, there are some countries where the insurance companies offer a package that include liability and legal responsibility for any injury or damage of property caused by those living in the house, including pets.

There are several companies offering insurance policies. However, an individual, before purchasing an insurance policy, should consider certain points like:

• Whether the policy would benefit him;
• Various clauses of the policy;
• History of the insurance company;
• Schedule of premium payment;
• Formalities required for filing a claim;
• Time taken to release the payment once a claim has been made.


If the answers to these questions are satisfactory, then you can go ahead and buy an insurance policy. However, it is also the duty of the individual to make timely payment of premiums to avail all the benefits of the policy.

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Written by Uncle Sam · Filed Under Insurance 

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