Imagine the worst-case scenario. There is an accident at home, like a fire, and you are now standing on the road, looking at the burning house wondering what the heck are you going to do now? Everything you own is gone and replacing it would cost a sum that is almost unimaginable.
This is exactly the sort of situation insurance was designed to bail you out of. Which brings us to the question of what household insurance is and if you really need it.
The short answer is that yes you do need household insurance. The long answer, and the answer to what it is, is give below.
What is household insurance?
If you search the internet for household insurance, you’ll come across terms like home insurance, property insurance or homeowners’ insurance which is a clue to what this is. This is an insurance policy that covers your precious house in case the unimaginable happens. It also covers some, not all, of the contents of your house.
Types of household insurance
There are three main types of insurance covers available under this type of insurance:
- Home building: This policy will only cover the building of your house in case of damage. Any loss or damage to the contents of the house won’t be covered.
- Household goods: Such a policy will cover only the contents of the house and not the building. This cover would include things like jewellery, furniture, or appliances.
- Home building and content: This is the best of both worlds because such a policy will cover the building and its contents.
How does home insurance work?
Just like any other insurance policy, you pay a premium and in exchange you get a policy that covers you for specific scenarios. Some of the scenarios are:
Damage due to fire: If your house suffers damage from a fire then you would be entitled to make claims against the building, household goods damaged by the fire and any personal items also damaged.
Damage or loss due to theft: If your house is burgled then the policy will help cover the losses incurred because of a break-in at your house. It would cover the theft of, or damage to, any household items like appliances, furniture, etc.
Damage due to natural calamities: If your house were to suffer damage as a result of a natural calamity like an earthquake then your losses would be covered by this insurance policy.
Damage due to water: Imagine sitting in your house and a water pipe, or tank, bursts. Not only are you suddenly sitting in a pool of water, but that water has also spoiled your furniture or appliances in the house. This is where home insurance can help deal with the losses.
If we were to go into more scenarios that such a policy can cover, we’d be here for a very long time. Which is why it is a good idea for you to read more about the other situations/scenarios that a home insurance policy can cover.
Should you get property insurance?
The short answers would be Yes! The long answers would be Yes! Consider how expensive it can be trying to pay for replacing furniture or appliances. Now consider the cost of actually paying for renovations after a fire from your savings.
When you sit and think about these things, you too will come to a conclusion that this is an insurance that you would want to look into.