Your home is probably the most expensive purchase you will ever make. Who knows what surprises are lurking around the corner, ready to catch out the unwary?
So, if you are a homeowner, it is more than wise to take out some form of home buildings insurance. In fact, it is essential!
As a home owner, you will need two types of home insurance to enjoy peace of mind. Firstly, home buildings insurance cover is required to protect you against or damage to your home caused by, for example, fire or subsidence. Home contents insurance cover protects your household possessions. This often includes cover for your liability to third parties in the case of any accidents that may happen in your home.
These two types of cover may be bought separately but it is often more convenient and usually cost-effective to buy them under one policy.
In the USA and some other countries, home buildings insurance is compulsory and is included as a condition of any mortgage loan. Most of these home building insurance policies are based on a term contract which is fixed for a period of time. The premiums - the monies due to the insurer, are generally required to be paid at the start of each fixed term.
In other countries home buildings insurance is not compulsory as in the USA. However, it is considered to be an essential requirement particularly in these days of climate change with severe flooding one minute and then drought the next. Clearly, these extreme conditions can have a major impact upon your property. Indeed, in some countries, some insurers will not insure your property against flooding in certain geographical areas because of the high risk. Conversely, drought can cause shrinkage, particularly in clay soils, which can cause foundations to subside. As a result, home buildings insurance is likely to cost us all a lot more regardless of where we live.
For more on Home Buildings Insurance, see Part II:
What Is Home / Buildings Insurance? - Part II