In a simple term, insurance means buying and protecting yourself, someone else, or any of your property against financial loss and risks. What you insure is what you buy and seek to protect by consulting the insurer which is the insurance company. The payment that ensues between both of you is called an insurance premium.
A premium can be an income as well as a liability. It is an income to the insurance company who puts it away in liquid assets to generate returns for the days you don't have a claim. It is a liability on you to keep paying your premiums for as long as the policy stipulates. Usually, most premiums are paid monthly.
However, the benefits of insuring yourself, someone else, or any of your property, are quite trumping than not insuring. The most important of these benefits is the coverage of your losses and damages. This way, you are assured of not losing at both ends. You are also able to better manage your financial risks and uncertainties.
There are different types of insurance, but according to Investopedia, there are only 5 insurance policies everyone should have. These policies include Long-term Disability Insurance, Life Insurance, Health Insurance, Homeowners Insurance, and Automobile Insurance. While other insurance policies are relatively significant, Home Insurance policy shares very peculiar importance.
For a start, home insurance is a form of insurance policy that provides coverage for your home in the case of losses and damages, which may range from accidents to natural disasters like fire, hails, etc. Home insurance, also called property insurance, provides the replacement cost, the actual cash value, and the extended replacement cost for your home, as both situation and contract permitted.
Like all other policies, a home insurance policy comes with requirements. Some of which request you stick to the guides which often require you to be objective and intentional about your property. Still, this form of insurance policy has proven to be a must-have. These are some of the reasons why you should consider insuring your property.
1. Residential Coverage
Your residence is prone to damages, even from asteroids. This form of damages is called perils and is different from hazards. A peril is a potential event that can cause a loss, such as a fire. A hazard is a factor that may cause or exacerbate a loss, such as a failure to regularly have the brakes of a car checked.
A peril can be open or named. Open Perils are general non-intentional risks. Named Perils are listed. Depending on your policy and the form of your home — if you are a renter or owner — both perils can be covered in HO3 policies (basic homeowners’ policies). Insurance companies indemnify you in the occurrence of unplanned risks and damages.
2. Structure Coverage
Another reason why you should consider having home insurance for your properties is that the policy covers "other structure" damages inflicted on your properties. "Other structure" damages include a smashed fence by a drunk driver or a tree felled on your detached garage. These repairs are paid for by your insurance policy, thereby relieving you of cost burdens.
3. Lawsuit Coverage
No one wants a lawsuit due to the amount of time involved, the expenses incurred, and the efforts it consumes. Home insurance policy prevents you from a lawsuit in situations where a guest is found reasonably injured in your home. If this guest decides to file a lawsuit for pain and suffering, your home insurance policy might save you from these unsavory moments by bearing the medical cost, paying the legal fees, and judgment expenses.
4. Liability Coverage
Sometimes, you accidentally hit someone or something on someone else's property. It could be from you or any of your family members. Instead of brooding about it for days, a home insurance policy will fix these liabilities for you. The policy will pay for the arising repairs, the legal fees (if any), and the medical cost of anyone found injured in the process of your damages.
5. Other Coverage
There are no complete benefits of what a home insurance policy can give you. These coverages mentioned are only some of the advantages of considering one. Other benefits include living expenses coverage, identity theft, and others.
There are several benefits of getting your home/property insured. It protects you from perils, repairs your structure, covers your lawsuit and liability, among others. In addition to these, it leaves you feeling secure about your property.