What is home insurance?

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Home Insurance is a type of property insurance that provides protection and coverage for damages that occur to the insured’s home. Home insurance provides homeowners with peace of mind if their home is destroyed by a fire or flood, for example, as policies provide the coverage for costs pertaining to the rebuild.

It is important to learn about home insurance and the different types of coverage that it provides. This understanding will allow you to decide what you want out of your insurance policy, thereby helping you choose the right home insurance policy for you and your home.

Home Insurance Summary

When you take out a mortgage loan and purchase a home, some lenders can insist that you take out a home insurance policy that provides specific coverage. The different types of coverage that a home insurance policy can include are Buildings Insurance, Contents Insurance, All-Risks Coverage, and Liability Insurance. It is most common for home insurance policies to be sold as one, single policy that can include these different types of coverage.

Choosing the right home insurance policy for your situation can be challenging. It is important to ensure that when choosing a policy, you don’t take out a policy that provides too much or too little coverage. If you are over-insured, your policy will be expensive to retain. Conversely, not enough coverage can lead to the policy not paying out enough money to cover the cost of damages.

Buildings Insurance Explained

Buildings insurance provides coverage on the physical home structure itself. This type of coverage will generally include the structure of the home – roof, walls, ceiling, etc. – permanent fittings – flooring, bathroom fittings, etc. – garages and other outbuildings, and parts of the home exterior – garden walls and fencing.

Contents Insurance Explained

Policies with a contents insurance component provide coverage to the actual contents of your home. This can include the refrigerator, freezer, TV, some flooring, etc. Contents insurance can either be a separate policy on its own or it can be combined with a single home insurance policy.

All-Risks Cover Explained

Policies with an All-Risks coverage component provides protection to your valuables, even when they are outside of your home. Loss or damage to these valuables will be covered by the policy. All-risks cover is optional and is an “extra” that is offered by some home insurance policies. 

Liability Insurance Explained

Liability insurance provides coverage to you if you or anyone else sustain an injury in your home or around your home. Most home insurance policies will include liability insurance to a degree. This type of coverage prevents you from being legally liable in certain situations if someone visits your home and is injured while there.

Deciding on a home insurance policy can be difficult, but being aware of what different policies can offer can ensure that you take out the best policy for your situation.