What is Home Insurance?

How much home insurance do I need?
When you buy a building and its contents insurance company decides the correct value on the items covered.This amount is known as sum insured.The premium depends on sum insured and the area where you live.The sum insured cover the total value of the goods and building.
Building insurance
Building insurance covers the structure of your home.It is insured as per re-construction value and not for market value.Re-construction value means the cost of rebuilding the property, including architect and surveyors fees, and the cost of clearing away the debris and meeting any new building regulations or by-laws.
Content insurance
Content insurance is calculated on market value. Market value is calculated on considering its demand and supply after excluding its depreciation value.

Household insurance policy are basically two types: contents insurance and building insurance. You can buy both of them separately or a comprehensive policy which covers the (the building,your personal belongings, third party liability and additional living expense).If you are living in rented flat you will need only content insurance policy in order to protect your belongings.

1. Building Insurance : Buildings insurance covers the structure of the house i.e the actual walls including fixtures and fittings, garages and outbuildings. Things like bathroom, kitchen, and boilers, room,door, windows and roof.You are paid by insurance company, to repair your house or rebuilt it, if it get destroyed because of any natural calamities like lightning, hurricane, earth-quake, flood, storm and others listed in your policy. Man made calamities like domestic gas explosion, fire, burst pipes etc. If you are staying in a rented flat building insurance is paid by the landlord, not by renters.
2. Content insurance : Content insurance covers the hosehold belongings which can be removed or transfer fron one place to another.This include:
   • The content of your home owned by you and your family members like clothes, furniture, and are covered in the policy.Electrical goods such as a television or washing machine, jewellery and so on. It also includes carpets, even if they are fitted
   • It covers the contents that can be taken outside the house such as camera or jewellery.baggage at time of travelling, pedal cycle, personal accident, medical expenses
   • It covers damages or losses arising from mechanical or electrical breakdown. If the item is 7-10 years old then the item is not covered in homeowner insurance policy. includes accidental breakage of mirrors and glass in furniture and there is some cover for damage to rented property where the tenant is liable for this.
   • It covers the damages arising arising from risk like fire; theft; escape of water from tanks or pipes; oil leaking from fixed heating systems; storm; flood; riot or malicious damage; explosion; lightning may impact by aircraft, vehicles or animals; falling trees; subsidence and earthquake.
3. Third party liability : If you or your family members cause any harm to someone or accidently damage others property, then,you or your family will financially get support from insurance company against any lawfull activities.
4. Additional living expenses : In case your house get damage due to fire, storm or any other insured disaster then insurance company provides an additional cost of living which covers your daily meal, hotel bills, living expense. Its coverage differs in different companies, but basically the coverage is around 20% of the insurance on your house.
5. Medical payment : Regardless of fault, this coverage pays the reasonable expenses for others accidentally injured on your premises or the areas adjoining your property such as sidewalks or alleys.It doen't cover the medical expense of you or your family members

What does the policy not cover?

1. Wilful destruction of property,
2. Loss, damage or destruction caused by war perils, wear and tear (damage caused on daily basis)and atmospheric conditions etc.
3. Losses like water leakage and theft won't be covered if your home is unoccupied for more than 30 days. 
4. Loss of cash, gold plates, stocks,deeds bonds, bill of exchange document of any type painting, works of art and antiques
5. Loss of jewelry and other expensive items taken outside while travelling
6. Terrorist activities

Does My Homeowner's Policy Cover Damage Caused by a Flood?
Generally, home owners policy do not cover losses due to flood. Flood insurance is available through the federal government's National Flood Insurance Program. Different company offer different policy you need to check this before taking the policy

• Report an offense to police: In case of theft or bulgary inform it to police and get the report from police mentioning all the items stolen.
• Call your agent or inform insurance company: Insurance company place time limit, to file a case you need to inform them within the time limit.
• Make temporary repairs : Take reasonable steps to protect your house from further damage.
• An inspector send by insurance company : You should co-operate fully with inspector to assess your claim.
• Submit documents to insurance company: Claim form, List of destroyed articles,police report are important documents.
Once the company agrees the term of settlement your money will be sent to you.

Will my room be covered under home insurance if I use it for business pupose?
Your room used for business purpose would not be covered under home insurance, for this you need another policy called Merchant cover plan.

Do I need home insurance for rented house ?
Yes, you need home insurance for rented house to protect your personal belongings and get liability coverage to protect yourself from lawsuits resulting from your possible negligence.

Will my premium be refunded if I want to cancel my policy?
Yes, your premium amount will be refunded.

Do landlord need to take another policy or they are covered in it?
Under the homeowner insurance policy land lord is financially protected against the loss of rent.

Is it compulsory to take Home Insurance?
Like car insurance its not compulsory to take home insurance. If you have taken home loan to purchase the house your lenders might take the home insurance policy in order to save his investment in home.