Are There Different Types Of Home Owners Policies?

Having settled in your house, you will want to protect this valuable — and probably the most expensive — asset you have. But a house is not a home without the touch of the personal, the things that you put in that add personality to your home and that make everyone in it, comfortable. The total value of these household and personal belongings amounts to a substantial sum and also needs to be protected. The house and the contents require different types of home owners’ policies.

Home owners’ policies may involve insurance cover for the house or the structure itself, or for the household contents, or may even allude to the life insurance you may have to purchase to cover your home loan. This aspect of insurance is important to a home owner’s plans for protecting his or her resources, but the reality is that many home owners often do not give enough consideration to home owners’ policies. You should know better.

Homeowners’ insurance policy

A homeowner’s insurance policy provides cover to the house and adjoining structures like the garage and any outbuildings, a tennis court or a swimming pool. The protection is against damage that may arise as a result of fire, lightning, earthquakes, and other natural disasters.

However, unless you make a specific request for their inclusion, the standard homeowners’ policy does not provide cover for subsidence or landslides, nor does it allow damage inflicted by people in a rage during a riot or strike. Aside from cover to the structure, some home owners’ policies may extend to certain fixtures and fittings and other items specified in the policy.

While it is good to note the inclusions, pore carefully over the small print for the exclusions. There may be cover for a particular event, e.g. a burst water main, but no cover at all for the resultant damage to other items in the house arising directly from that event, e.g. heavy water stains on your walls. For some policies, both main and resultant damage may be covered but subject to two separate excesses, one for each. One insurer may automatically cover you for the times when you are renovating your house, and for damage to it during the renovation, while another insurer may not.

Household contents insurance policy

A household contents insurance policy provides protective cover to the personal belongings and other contents of the house for damage or losses caused by fire, theft, accidents, natural disasters like storms and floods, water leaks, etc. As in home owners’ policies, you must become very familiar with the exclusions of the policy.

An important exclusion may be refusal of cover if a burglar breaks into the house at a time when you left your house unoccupied for a long duration during the year — some insurance companies say 30 days while others may have 60 days. There will be other exclusions, like normal wear and tear or inadequate maintenance.

You will also want to be on the alert for the excesses, which will be quite detailed. For instance the excess for theft may be a thousand Rand, which means the first thousand Rand loss due to theft shall be for your account.

Speaking of theft, you must pay close attention to the conditions you must fulfil in order to remain qualified for cover. Such warranties involve the security measures you must have in place in the house, which assure the insurer that you are taking reasonable precautions to prevent theft and burglaries from occurring, e.g. alarm systems, security gates, and burglar bars on the windows.

All-risk insurance provisions

You have some personal items you normally carry with you that could easily get lost. These are usually small things like jewellery, cell phones, laptop computers, bicycles, cameras, etc. Generally, these items will not be covered. You will have to make sure each one is listed on the policy along with their specific insured values.

In these different types of home owners’ policies, you need to make sure you do not under-insure the house or its contents. If the unthinkable happens and you have not valued them at their replacement cost, you would find yourself at the losing end.