Home owners insurance covers you for damage to the building itself and to fixtures and fittings in your house. Home owners insurance will cover you for damage caused by fire, lightning, explosions, storms, wind, water, hail and earthquakes and accidental damage to sinks and toilet bowls or other sanitary-ware. Home owners insurance also covers your liability if someone is hurt on your property.
When the bank grants you a home loan, it will insist that you insure your house against fire, lightning, rain, storms and other damage. If the structure of your house is damaged the insurance payout will help you to rebuild or repair your property. The policy will not cover you for subsidence and landslip or damage through riots and strikes unless you specifically include it. There are other exclusions in your policy and it is important to read it to understand your obligations and the limits of your cover.
It is your responsibility to make sure your property is insured. The cover must include buildings, outbuildings, garden walls and swimming pool. The bank will insist you do this before granting you a loan. And the bank can insist that you take out insurance with a company of its choice. The home owners insurance premium is often paid as part of your monthly home loan instalment but it is cheaper to pay the insurance company directly. If you don’t have the year’s premiums in cash, you can pay monthly.
The secret as with most types of insurance cover is to shop around and find an insurer that offers a package to suit your needs. Very often you can get a good package to cover your car as well as your home owners insurance more cheaply.