Home Insurance

All You Ever Needed to Know About Home Insurance

According to David Murray Financial System Inquiry’s Final Report released in 2017, 29% of homeowners and 67% of renters in Australia do not have any form of insurance and 40% of households who have insurance, are underinsured.  According to a report by ISO, in 2014, 5.3% of all insured homes in the United States had various claims of which 97.3% of these were as a result of theft and property damage. What should this tell you as a homeowner? If you don’t cover your home and property you might incur huge losses as an individual.

Have you insured your home? You may never know the peril that might damage your property. Reports by Insurance Information Institute calculations based on ISO between 2011 and 2015 show that about 50 insured homes have their property damaged by water or ice each year, while about 235 and 290 insured homes have their property damaged through theft and lightning/fire respectively each year. When it comes to body injuries or property damage caused by policy holders to other people, the report shows there are about 1,015 policies each year. Let’s assume you don’t have any policy, how hectic will it be when your property is damaged or stolen? That’s why you need to know about this policy. Let’s explore more.

Various Types of Home Insurance

Before making a sound decision of whether to cover your home for the first time or to upgrade your current policy, you need to have some knowledge about diverse types of homeowners insurance. The following covers are common to a standard home owner:

  • Dwelling Coverage – this policy covers structures in your home including ceilings, floors, built-in appliances and structures that are attached. You are covered from fire, theft, vandalism, hailstorms, etc. In case your home is completely destroyed, this policy can help you rebuild your home. Property Damage coverage usually caters for any damage on the property covered.
  • Contents Coverage – this policy covers all your furniture and clothing in your home. In case a tragedy happens in accordance with your policy, you receive funds that are equal to the value of the item.
  • Personal Liability – this policy covers for any injury that may happen to you or your guests in your home.

The above may not cover everything and therefore you can customize your insurance policy to suit every need. Here are optional home insurance covers.

  • Flood Insurance – this covers your home from flood-related damages.
  • Earthquake insurance – covers your home from earthquakes
  • Personal umbrella liability insurance – it’s an additional cover for your bodily injury and of others, property damage etc.
  • Brand new belongings coverage – provides funds to repair or replace belongings
  • Better roof replacement – helps you rebuild a stronger and safer roof.
  1. Cancellation of Home Insurance

Having an understanding of why your home insurance can be canceled is very important so as to avoid such occurrences, however, let’s first look at the types of cancellation done without your permission:

  1. Cancellation – the insurer terminates the policy before the expiration date
  2. Rescission – the insurance company never covers anything from the beginning but it returns your money
  3. Nonrenewal – the policy is terminated at the expiry date.

Your policy can be terminated after 60 days of taking the cover as a result of the following:

  • Failing to pay premiums
  • Having too many claims on a single policy
  • Leaving your home vacant for a long period of time
  • Not doing certain repairs
  • Providing false information
  • Non-compliance with safety regulation

Your insurance company must notify you of policy termination 30-60 days before stating reasons for their action. You can go to court if you are not comfortable with cancellation.