Securing oneself from the troubles of tomorrow is one of the wisest decisions a person can make. In practical sense, insurance is an important policy where the State guarantees protection to its citizens by allowing insurance companies to answer for the possible damages. Such insurance policy is imbued with public interest and is recognized across states.
Availing insurance coverage as a guard against a specific peril secures the insured that his property will be protected from any unfortunate event. Home insurance, for instance, covers indemnity in case of any sort of house destruction. Insurance companies also answer claims resulting from the injuries sustained by other people on the property. In effect, the Home Insurance answers for all financial consequences that might arise out of an uncertain or unfortunate event. It is one of the best investments in securing the family’s property. Home Insurance otherwise called Homeowners Insurance is a combination of Hazard Insurance and Liability Insurance.
Hazard Insurance is an indemnity that covers damage or destruction of the property on the occasion of unforeseen or uncertain event including but not limited to fire, storm, vandalism, or theft. There are two policies covered under the Hazard Insurance. These are the valued policy and the open policy. If the insured enrolled for the valued policy, he will be indemnified of the value of the thing lost. On the other hand, if the insured enrolled for the open policy, he will be indemnified for the actual cost of the loss on the property. These two policies are important to distinguish because it has a different effect on the amount of indemnity that can be recovered.
While Hazard insurance is a Home Insurance centralized on the property that was lost, Liability Insurance is concerned on the injuries sustained by a third person on the property that was destructed. This kind of Home Insurance indemnifies a person injured to the extent of the expenses incurred for medical treatment. This is a personal liability of the insured to a third person who suffered injuries by reason of accident on the property.
Insurance is also required in case of mortgaged property to ensure that the property secured under the mortgage contract will remain to be in good condition within the term agreed upon and guarantees indemnity in case of destruction.
Like any other policies, Insurance has some limitations in granting indemnity. Examples of these inclusions are the jewellery items and cash. The reason behind this is because it exists independently from the house and has a separate value than that of the house in a Home Insurance.
Aside from the limitations, there are also exclusions on the insurance coverage. It excludes the coverage from flood damage and earthquake damage. Such situations may be covered by other insurance coverage and not by the Home Insurance. At the same time, insurance companies are not responsible in the cost of the maintenance of houses to avoid destruction. This is something that is within the active management of the insured on his property.
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