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Home insurance is a contract between an insurance company and the owner of the home to cover certain types of damage to the property and its contents, theft of personal possessions, and liability in case of lawsuits based on incidents or events that occur on the property. Home insurance provides compensation for damage or destruction of a home from disasters. In some geographical areas, the standard insurances exclude certain types of disasters, like flood and earthquakes that require additional coverage. Maintenance-related problems are the homeowners' accountability. The policy might include inventory, or this can be bought as a separate policy, particularly for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for property damage caused by members of the household, including pets. To take an insurance policy, which is based on the value of the home and what is covered in the policy, the customer has to pay a premium set by the insurance company. If he/she has a mortgage loan, their lender will require them to have enough homeowners insurance to cover the amount they owe on the loan.
Home insurance policies differ substantially from contract to contract and from insurer to insurer as well as from region to region. Almost all policies have exclusions, which are causes of loss that are not covered. All the coverage and omissions of a particular policy are spelled out in the terms and conditions. The cost of home insurance does not depend on the neighborhood you stay in. Home insurance is just a structural protection. The policy compensates you for the loss you suffer due to damage to the structure of your house such as the walls, floor and ceiling. Home content insurance is a cover taken against theft of your belongings and damage to works of art in your home. Home content insurance and structural insurance taken together provide a comprehensive protection to your house. If you stay in a rented house you can take only content insurance and not a structural protection policy as the house is not yours.