Insurance Dictionary

Home Insurance

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Insurance Dictionary -> Home Insurance

Home insurance (often called hazard insurance, house insurance or homeowners insurance), is a specific form of insurance agreement that covers the privately owned home of the policy holder against a number of interchangeable risks, hazards and events. These may include physical damage from natural disasters, contents loss or damage, liabilities and accidents such as causing a fire by cooking. Policies vary a great deal from case to case and do not necessarily cover all of the above. However it is almost a given that you take out the bare minimum in cheap home insurance before purchasing a house, else the parties involved would never agree to a sale or mortgage. In fact it is normally a condition of taking out a mortgage that you purchase home insurance.

The cost of home insurance is based on the value of the house and how much it would cost to replace the home should it be destroyed completely. This is coupled with any additional personal items added to the policy (home contents insurance), and then applied to a risk factor, often depending on the location of the property. For example, a house located near an earthquake prone region is more likely to get damaged, and therefore the insurance policy would cost more, because the company is more likely to have to pay out. If you own a home in a natural disaster prone area, you can choose not to be insured for that disaster to bring the insurance premiums down, but you will not be covered if the disaster occurs. This is common in California.

There are certain techniques that can bring home insurance premiums down if brought to the attention of the home insurance companies. For example, having state of the art fire alarms, a sprinkler system, burglar alarm, and being located near emergency services will bring the premium down.

The best thing to do to compare home insurance is by getting online home insurance quote or finding a home insurance broker. Some people also get holiday home insurance. Getting an insurance policy for both your home and holiday house will save you money.

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