Home insurance is one of the most important things homeowners should concern themselves with. This insurance can protect their home in an evet of fire or major damages to the property due to things such as a collapsed root.
But there is no basic contract that can be drawn up for everybody, just like any other kind of insurance. Every contract will be a little different to reflect the special needs and situations.
There are however some home insurance basics that every home owner should know. These basics start with the three general categories that home insurance can fall into.
Named perils is the first category of home insurance. This will protect the homeowner from damage caused by natural disasters such as fire, lightning and windstorms. This is the least expensive type of home insurance although it poses much risk to the homeowner. It must be specifically mentioned in the insurance policy which threat will be covered or not.
If a flood occurs in an area that is not known for flooding the homeowner could be stuck with paying the bill because not every homeowner can foresee every situation. Also only natural damage is included in named perils. This means that if any unnatural damage occurs the homeowner will also be solely responsible for paying any damages.
Broad insurance, also known as “all risk insurance”, provides coverage that falls in between the other two categories. This will protect the homeowner from any risk or threat to the homes physical property. For the contents within named perils must be named specifically. The price also falls right in between the two other categories.
Comprehensive insurance provides total protection. Any contents within the home are protected as well as the physical property itself. It does not only provide insurance for everything related to the home but also coverage for any type of damage that does not even needs to be specifically named. This is the most expensive type of home insurance a homeowner can buy because it covers everything. They can however be assured to be well protected.
An insurance agent will discuss with the homeowner what they feel is best depending on the needs and other factors like the place they live. The cheapest does not always provide you the best protection and the most expensive is not always the best. The homeowner must use due diligence to decide on home insurance.