Having your own home is an amazing achievement and a great feeling. It also comes with a lot of responsibility. There are many practical issues to tackle and precautions to take.
When you do move into your own home, one of the first things you need to think about is acquiring adequate insurance for it. You may find yourself wondering about different types of home insurance, and which would be best for you.
The type of insurance you will need will depend on a number of factors including the type of home you have, where it’s located, and whether you’re renting or not. Read on for a quick and dirty introduction to the different types of home insurance.
Renters Home Insurance
Even if you don’t own the home you’re living in, it may be a good idea to take out insurance. Renters insurance is a common type of insurance that protects the property a tenant has inside their home in the case of things such as theft, vandalism, and fires. It does not, however, insure the dwelling itself, as the tenant is not the owner.
Standard Homeowners Insurance Policy
For homeowners, the coverage an insurance policy provides should be a little more comprehensive. Home insurance policies can vary greatly in what they cover and how much they cost. You should shop around for quotes before settling on one company and be aware that you may need to increase your cover in certain instances (about which you can read more here).
There are, generally speaking, three main components to a standard homeowners insurance policy.
Dwelling coverage protects the home itself. This means it covers the walls, ceilings, floors, built-in appliances, and attached structures such as garages.
As the name suggests, contents coverage will protect all of the belongings that are inside the home. If something were to happen to them, you will receive monetary compensation for their value.
Personal liability insurance will cover any injury that occurs to guests inside the home. It also covers property damage in certain predefined cases.
Extras to Consider
On top of the standard types of renters home insurance and homeowners insurance, there are extras you may want to consider. These include things such as flood insurance, earthquake insurance, or insurance for other structures on your property that are unattached to your home.
You can decide if these might be beneficial to you based on your location, the property you have, and the likelihood you think there is of a flood or earthquake occurring.
The Different Types of Home Insurance
In general, although there are different types of home insurance, the basic components of each are relatively uniform. The most important thing to remember is to always shop around in order to find the price and the policy that will suit your and your living situation best.
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