What is Homeowners Insurance? Why do You Need It?

Homeowners insurance is a type of property insurance that provides financial protection in the event of loss or damage to an individual's residence or assets in the home. This policy usually covers interior and exterior damage, loss or damage to personal assets, fire, flood, accidental damage, and more. Hence, the type of home insurance decides the extent of coverage it provides.

 

The types of homeowners insurance and what each insurance cover is explained in this article.

Importance of Homeowners Insurance

Despite the best security protection measures that are put in place, there are chances of theft, damage, and natural disasters that cannot be fully eliminated. These unexpected issues can cause damage to the property and unexpected costs. This is when the role of home insurance comes to play.

Home insurance protects your home and family comforts. It helps to recover the damage caused due to fire, floor, or unexpected damage to the property. In the UK, where hurricanes or tornados are regular visitors, home destruction and recovery are frequent. Home insurance for UK-based dwellings is inevitable.

Home burglary and theft insurance cover eligible damages or loss that is caused due to theft or burglary. Even if the client retrieves the belongings it is a very tedious process and the safety of life during theft is not guaranteed.

A home security system is an efficient way to deter criminals and theft, keeping the life and property of occupants safe. Many homeowners insurance companies even provide a discount for installing alarm systems or other theft deterrents. The new home security and alarm system can be accessed from anywhere around the world and they come with new technologies not only to prevent but also to stop burglaries. Visit the website for more details.

Types of Homeowners Insurance

Home insurance for properties is available in two forms:

1. Building Insurance
2. Contents Insurance

1. Building Insurance

Building insurance covers the damage to the structure of your home, for example.

• Damage to the walls, roofs, and floors
• Damage to fixtures and fittings
• Damage to fittings like radiators, baths, and showerheads
• Vandalism
• Subsidence, falling trees, fire, smoke, explosions, car and lorry collisions, water damage from leaking pipes, oil leaking from your heating system, and natural events, such as storms and floods.

Flood insurance is covered under the standard buildings insurance policy. With flooding increasingly common in the UK, it can be difficult to find affordable cover for properties in locations considered a possible flood risk.

Building insurance is not compulsory, but it is considered a condition of the mortgage. If you own a property with or without a mortgage, then building insurance is a top priority. If you live in a rental property, then you need not take building insurance. It's the landowner's responsibility to make sure the right cover is taken for the property.


Also Read On: Builder's Risk Insurance in Construction Industry

2. Contents Insurance

Contents insurance is a type of homeowners insurance that covers loss or damage that is caused to all the items in the buildings that are not part of the structure. It mainly covers the loss of personal belongings and all things that are not physically attached to the building.

Contents insurance is optional, unlike building insurance. But contents insurance is necessary to insure the personal possessions whether you are tenant or the owner.

Contents insurance includes:

• clothing
• furniture
• jewelry
• electrical goods

Contents insurance does not cover damage caused due to wear and tear, virus on computer, etc. Most contents insurance policy have a limit on the value of possessions they cover. If you need to insure particular expensive items, we need to pay extra for extending the insurance.

If you’re renting a whole property from a landlord or just a single room, you probably need contents insurance if you want to protect your personal possessions. Your landlord might have contents insurance too, but it’s likely it will only cover the items they own (such as carpets or furniture).

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