House insurance ( home insurance or homeowner's insurance ) is a combined insurance policy that gives protection to one's household against disasters. A standard home insurance policy safeguards not only one's home as well as its internal contents, but it also covers liability/legal responsibility for any injuries and property damage caused by the homeowner or by his/her family member and even by household pets to other people. This type of insurance covers damage caused by disasters such as floods, earthquakes and poor maintenance. The homeowner has to buy two separate policies for covering flood and earthquake while maintenance-related problems are the homeowners' responsibility.
Functioning of House Insurance :
Generally, the house insurance policy is a term contract (effective for a fixed period of time). In case of home insurance also, the insured pays a premium to the insurer. (The insurer mostly charges a lower premium if there are lesser chances of the home getting damaged or destroyed). In some cases , perpetual insurance (home insurance without a fixed term or date as and when the policy expires) can also be obtained.
House Insurance Policy :
A standard house insurance must include four important types of coverage. Such as:
1. Coverage for home structure
2. Coverage for homeowner's personal belongings
3. Liability coverage
4. Coverage of additional living expenses in case of temporary homelessness in event of an insured disaster.
Types of House Insurance :
• In the US, house insurance policies are classified as HO-1 (Limited coverage policy), HO-2 (Basic Policy), HO-3 (policy cover all aspects of home, structure and contents besides liability of any form), HO-4 (renter policy), upto HO-8 (older home insurance policy).
• In India, insurance agency like ICICI Lombard offers home insurance policy which covers losses to the structure and contents of one's home due to any natural or man made calamities; burglary cover for contents; and additional rental expenses for alternative accommodation in case of damage to home.
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