Home Insurance – Protecting your home against damage
Homeowners insurance, sometimes known as hazard insurance, often covers a large number of eventualities, and there are many different types of homeowners’ insurance policies, each tailored to a specific event. Basic home insurance policies offer personal insurance protections, including losses which occur to the policy holder’s belongings, or home, loss of the use of their home, i.e., additional living expenses, and liability insurance for any accidents which occur on the property.
Home insurance policies are often abbreviated in the real estate industry to the simple acronym HOI, and can come in a bewilderingly different array of policies. Home insurance policies will also spell out exactly under which circumstances you can expect them to pay out, and many basic policies will not cover such things as fire, floods, war or acts of God, and separate insurance policies, such as fire, flood or hurricane insurance, can be purchased against this eventuality. The cost of home insurance policies vary, depending upon the items insured and how far the cover extends. Home insurance policies are normally term contracts, and last for a given amount of time, with a premium paid each term. The price of the premium depends upon the perceived damage to the home; for instance, if your home is located near a fire station, and has a good system of sprinklers, or is protected from theft by a good security system, your premiums will be lower. Protecting your home from damage is something you should think about, as many of the methods used are relatively simple and expensive, and would make for a decent saving on home owners insurance premiums. In America, when one takes out a mortgage on a home, it’s normally required that home owners insurance is in place, in order to make sure that, should anything happen, the mortgage lender will not suffer a loss. If the value of the land alone is enough to recuperate the loss even if the house is damaged, home owners insurance might not be necessary. If you do decide on home owners insurance, which is highly recommended, everyone with a vested interest in the property should be named on the policy.
If your home is located in an area that is at high risk of floods, hurricanes or other natural disasters, purchasing the relevant insurance is an important consideration. Your land does not need to be near a coastline to be at risk from flooding; flash floods can occur when a higher than average rainfall occurs within a very short period of time, and large bodies of water such as lakes are also considered a flood risk.
Choosing home insurance used to be a fairly complex process; however, in 1971, the Insurance Services Office or ISO began standardizing home owners insurance, and currently, there are seven specific types, which are referred to as HO-1 through to HO-8, which HO-7 missing. The objective of the Insurance Services Office is to make insurance policies more comprehensible, among other things. The Insurance Services Office also monitors regulatory standards and insurance laws, and communicates with regularity authorities.
Your local insurance agent will vary depending upon your state and zip code – for instance, home owners insurance in Dallas will need to be handled by a different company than if you wished to purchase home owners’ insurance in Chicago, New York, Boston or Phoenix – but there are many ways of finding out exactly who you need to contact. It’s important to get home owners’ insurance quotes from a wide variety of insurers before finally deciding on one, as the quotes given for the insurance policy can differ between insurance brokers.