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Homeowners Insurance Definition
Home insurance or homeowners insurance is a type of property insurance that offers protection to a home that may constitute buildings and what is within the building. This may cover fences, garages, solar panels on the building, high-value items, jewelry, and art.
As the name suggests, insurance offers coverage for some named peril or risk that may direct or indirectly lead to loss of property or investment. Insurance has existed for corporate bodies wishing to insure their valuable assets against certain risks that may occur frequently given the geographic location and type of risk. Home insurance is a new and unexplored market brought to the limelight.
Who May Take Up Homeowners Insurance?
1. Home owner
Anyone who owns a home is legible to take up home insurance policies that may cover all the property or specific items in the property broadly. Homeowners may also take insurance policies that cover damages or unintentional injuries incurred within the property.
2. Individuals at rent
A tenant may take up a homeowners insurance policy to safeguard their valuables while renting the property.
3. Cooperative societies
A member of a cooperative society may buy home insurance to stand in for the cooperative society at large. This may be purchased for a single asset or the entire corporative structure.
Advantages of Homeowners Insurance
1. Relatively lower costs
The cost of insuring is lower than retention against risk, especially for valuables such as jewelry. The insurer covers costs that would be expensive for the insured to start from scratch.
2. Protecting the insured from lawsuits
Injuries on the Homeowner’s property can be safely compensated without the interference of lawyers, which may increase costs for the insured.
3. Protecting owner’s valuables
Homeowner’s insurance covers and makes up for any risks to the owner’s valuables from vandalism, theft, and natural disasters.
4. Protection of owner’s detached property
These include other structures apart from home: fences and garages that may be costly to repair.
Disadvantages of Homeowners Insurance
1. High overhead costs
These arise from insuring a vintage home with high costs of repairs. These eventually increase the cost of insurance, making it expensive.
2. Not suitable for small homes
Home insurance may be too expensive for small homes compared to big high, priced homes getting the same policy cover.
3. Limited coverage
Homeowner’s insurance policies do not cover all risks facing a home. One may require more than one policy to cover their home effectively and adequately. This, in turn, increases the number of premiums to be paid.
4. Hidden costs
Not carefully reading the terms and conditions of a risk coverage may reveal later some hidden costs that the insured may not be aware of. This may cause disputes that may discharge the cover prematurely.