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Houseowners insurance - A smart financial plan

Residing in a house of your own is perhaps one of the prime dream that each individual has. This wish makes your house one of the greatest assets of your life. But, unlike our other assets like car, jewellery, etc. we tend to ignore the security aspect of our home. Even today, many people in India are either ignorant or unconcerned about getting a risk coverage for their house.
Unlike motor insurance, house owners insurance is not mandatory, yet it holds an equivalent importance in one's life. This is because, like unlike an automobile, your house is an appreciating asset; and any loss or damage to this will mean a big hole in your pocket.
In order to secure earnings and savings, it is always advisable to buy a homeowner insurance.
What is homeowner insurance?
Houseowners insurance is an agreement between a houseowner insurance company and a homeowner, wherein the former party agrees to protect later's insured house towards losses and/or damages against unforeseen events. Like any other insurance policy, a houseowner's insurance plan too functions on basis of regular premium amount paid by the insured to the company.
Houseowner insurance company offers risk coverage towards damage to your house and your legal responsibility for any loss cause to other people. For instance damage caused to a third party by your family pets will also be covered in a houseowners insurance plan.
Though a property insurance covers loss and/or damage caused due to most natural and/or man-made disasters, there are exceptions. Different houseowner insurance companies have different exclusion lists in the policies they offer.
What does a houseowner insurance covers?

In general, a homeowners insurance policy consists of four main types of risk coverages:
a) Coverage towards structure of home,
b) Coverage towards personal belongings/house contents,
c) Third party liability protection, and
d) Additional living expenses in case you shift your base to some other place for reasons like fire, flood, etc.
Structure of house: If your house is damaged because of factors like fire, hurricane, hail or other disaster included in your policy, then a standard houseowner's insurance plan will make payments for repairing or rebuilding your house. However, this policy may not over damages due to flood, earthquake, normal wear and tear, if not mentioned in the policy document.
A standard houseowner's insurance policy may also cover detached areas of your house like garage, tool shed etc.
Personal belongings: While buying your house insurance, you can also secure your house contents likes furniture, electronic items, etc. In case you lose these personal belongings due to theft, burglary, fire, hurricane etc, your houseowner's insurance will provide you with the claim amount.
In case you also want to cover you precious belongings like jewelry and silverware, you might need to speak to your houseowner insurance company for some additional coverage.
Such insurance plans consider losses due to theft, fire, lightning, explosion, vandalism, riot and even falling aircraft.
Third party liability protection: In case your neighbour or a third person is injured or experience a loss or damage of property because of you, your insurance policy can pay for the same. However, the sum amount will vary depending on your policy. This part of your policy also takes care of the cost of your court hassles.
Additional living cost: In case your home is damaged due to natural or man-created disaster (mentioned in the policy), following which you have to temporarily shift your base to a third place like hotel, a houseowner's insurance policy will take care of your hotel bills, meals etc.
While buying a policy, it is important to note that all the coverages offered by your insurance plan have been assigned a specific percent of your insured amount. Risk coverage towards cost of additional living varies between each company.
 Buying a houseowners policy offers extra security for your investment.

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