What Is Home Owners Insurance?

Get started with home insurance with our Beginner’s Guide. The objective is that after reading this, you can compare and find the most suitable coverage for your home.

Whether you rent or you own your home, you must know some essential aspects of home insurance. Obtaining home insurance is highly recommended to have the peace of mind of being covered against any eventuality that may arise, not only to protect your family but also to respond before damage is caused.

In this guide for beginners, we explain the basic concepts that you should know before obtaining home insurance, the types of insurance on the market, and some key points that are important to take into account beforehand.

What Is Home Insurance? 

Basic Concepts

Home insurance is one whose purpose is the financial protection of a home, by its owners and tenants, against the risks that may occur in the future.

To properly understand the terms related to purchasing home insurance, you must know some concepts.

Continent: It is the structure of the property, of which the roof, the floor, the walls and all the structural elements are part. The value of the container declared in the insurance should correspond to the reconstruction value of the property. The value of the land is not included in the value of the continent.

Inventory/Content: These are all the accessories that are inside the house, such as furniture and personal belongings. The value of the content is determined by each insured and will determine the maximum cost that the insurer will assume in the event of a claim.

Premium: It is the annual price paid for the home insurance contracted, and it varies depending on the value of the container and the value of the insured content and the risks and services contracted.

Is It Mandatory To Take Out Home Insurance?

Obtaining home insurance is not mandatory, except in the case of mortgaged homes, which must take out damage insurance for the property affected by the mortgage. In these cases, you can take out the insurance with the entity you want, that is, no one can force us to take out the home insurance with the bank that grants the mortgage.

However, it is highly recommended to take out home insurance that covers, at least, the continent and civil liability.

What Are The Basic And Recommended Coverage Of Home Insurance?

Home insurance usually offers basic coverage that is considered recommended and that saves a lot of money and many disorders in the event of a claim. It must be borne in mind that accidents at home can occur for many reasons beyond personal responsibility and that no person is exempt from suffering these mishaps.

• The basic coverages that all insurers usually recommend are those that cover damages on the continent, damage to the content, civil liability (for damages caused to third parties) and legal defense to claim damages caused by third parties in our home.
• The mainland damage coverage covers repairs for damage caused by fire, theft, water leaks, etc. This coverage has limitations and exceptions that must be reviewed. Sometimes this coverage is included in the community insurance, so it would not be necessary to purchase it.
• Contents damage coverage covers the repair or replacement of items damaged by covered risks. This coverage has a limit, and in some cases, it is necessary to justify the value of the insured objects.
• Liability coverage covers repairs or, where appropriate, compensation that has to be paid to other people for damages caused by a breakdown or problem in our home.
• The legal defense coverage covers the claim for damages that others have caused to our home, in addition to other coverages that vary depending on each insurance.
• These risks are usually covered by multi-peril or combined insurance.

How Much Does Home Insurance Cost?

Depending on the characteristics of the continent and its value, the value of the content to be insured and the amount associated with civil liability, among other features, the price of home insurance can vary greatly. We invite you to consult our insurance comparator and be advised by our experts to find the best insurance at the best price.

Do I Have To Take Out Home Insurance If I Rent?

Specific responsibilities will be in the hands of the landlord, while the tenant will bear others. Therefore, the most advisable thing is that you take out an insurance that covers your responsibility as a tenant and that also includes a first-risk coverage so that your insurance can solve any incident that arises. In contrast, the owner or person in charge takes charge of solving it.

Many insurers market renters’ home insurance at very competitive prices. Try our insurance comparator to find the home insurance that best suits your needs.

Does Home Insurance Have Coverage Limits?

The limit is set by the insured amount and the type of loss that occurred. To avoid surprises, it is essential to insure both the container and the content for the appropriate amounts and to have civil liability insurance that covers at least up to 300,000 dollars.