What Is Home Insurance and What Does It Cover?

What is home insurance and what does home insurance cover? This insurance protects the home and its contents from the occurrence of various risks described in the policy; provides basic coverage in case of fire, earthquake, theft, explosion, water damage and strong winds, among others. This insurance protects the home against the risks to which it is exposed and guarantees that, in the event of fire, theft or any other insured event, the goods acquired with so much effort can be replaced.

Some companies offer additional coverage for damage to electrical and electronic equipment, such as computers, televisions, and the refrigerator, or protection for jewelry, artwork, and bicycles, among others. There are companies that provide plumbing, locksmith, glass change and even home medical assistance services.

Who is it for?

This insurance protects the home and its contents from the occurrence of various risks described in the policy; provides basic coverage in case of fire, earthquake, theft, explosion, water damage and strong winds, among others. This insurance protects the home against the risks to which it is exposed and guarantees that, in the event of fire, theft or any other insured event, the goods acquired with so much effort can be replaced.

Some companies offer additional coverage for equipment damage.

What does its cost depend on?

The cost of the premium for a home policy depends on the insured value, the coverage contracted, the location of the home and its characteristics, among others.

Home Insurance: the best support for your family and your assets

We know that your home and what you have inside it you have achieved with effort, that is why we protect your home against everything that can happen to it. In addition, we are with you and your family to support them if they cause damage to others.

When you have home insurance you know that, no matter what happens, you preserve the heritage that you have built over the years or that you are starting, thus you protect the place where you live, the appliances and furniture, your personal items and even the clothes you wear every day.

If at any time an event covered by insurance occurs, such as a fire, hurricane, landslide, among others,  we will refund the money to replace what is affected.

What good is home insurance for me?

Insurance is full of possibilities, but it can also be full of headaches, if you are not clear about what you want and what you can demand. When it comes to purchasing insurance, even if it is an arduous and boring task, it is vital that you know exactly what covers you and what does not. Especially in home insurance it is very important that you be thorough and analyze and evaluate everything you need and the company can offer you.

Home insurance: what kind of policies are there?

Home insurance is designed to offer peace of mind to the policyholder. It is precisely thanks to this interest that more and more companies decide to expand their coverage as a method of competitiveness and attraction.

The problem is that the world of insurance has grown so much that more and more doubts arise among those who seek to hire it. If you are thinking of taking out insurance or changing the one you already have, keep reading, because we will solve the most common questions to make it as easy as possible.

Why buy home insurance?

When addressing the types of home insurance we clarified a very frequent doubt: the obligation (or not) of having contracted home insurance. As we have seen, the confusion is given by the obligation that banks do impose on clients who sign a mortgage to take out home insurance that protects at least the continent, in case of fire. In this case, for the mortgage loan to be granted, the future owners have to take out insurance.

In other situations, home insurance is not mandatory, although highly recommended. There are many risks (besides fire damage) that a home is exposed to on a daily basis, and good insurance can protect you against many of them. But do you know what insurance your home needs? Whether you have to subscribe a mandatory insurance or if you are looking for the solution that suits you and your family on your own, one of the most important factors is knowing which insurance best suits your needs.

Multi-peril insurance is usually a very comprehensive policy. Among its basic coverages are Civil Liability Insurance, coverage for fire, water damage, electrical damage, theft, etc. But those with greater coverage can cover cases such as robbery outside the home and personal expenses in the event of a claim, as well as providing a wide portfolio of services, such as assistance at home. In addition, they are usually flexible insurance, so you can adapt it to your needs and hire those coverages that suit you best. This may be one of the most recommended home insurance, but as we have already said, everything will depend on the needs and demands of the user when hiring the policy.

Why should I buy home insurance?

Your home is very important. It is the place where you live, you have your space, where you have your belongings… Therefore it is important that you are well protected against possible unforeseen events.

He thinks that you need insurance to cover you in situations where, for example, a pipe breaks and you wet your neighbor below. Or imagine that one day of rain and wind you have the bad luck that a tree falls on your window. You need home insurance to take care of damages that occur due to meteorological reasons.

All the damages that happen in your house or cause to a third party, if you do not have contracted insurance, you will have to take care of yourself, which could mean a large sum of money. Therefore, having a good home insurance will save you many troubles and will give you peace of mind.

What does home insurance cover me?

This is usually the first question that comes up to anyone who is considering purchasing home insurance. From Fintonic we will try to solve the most frequent doubts so that you can contract the policy that best suits you.

Usually they tend to include both the content and the continent. What is the difference between the two? The continent refers to the structure of the house (roofs, walls, floors.) and the content is the goods that are inside the house. Even so, each insurer decides to cover a specific series of elements, so it is necessary to study the policy carefully to know what we are hiring. In each part (content and container) it must be specified, in a concrete way, what it covers in the event of a claim.

Frequently asked questions

  • If I change my furniture, should I notify the insurance? According to Law 50/1980 on the Insurance Contract, yes, it is mandatory to do so. It is necessary that the company is up to date with all the changes that we are making in the home.
  • If I have community insurance, do I need home insurance? This may be another of the questions that arise when hiring your own insurance. The truth is that it is best to hire your own. Community insurance covers a number of things that home insurance does not. Community insurance is focused on the common areas of the building, not on what happens inside each home. This is the reason why, despite having contracted community insurance, it is highly recommended that you also take out your own insurance and save yourself the odd inconvenience.
  • I live in a rental apartment. Who pays for home insurance? There are many people who live rented and, at this point, doubts appear again about who the insurance payment corresponds to.
  • Before we have explained what is the difference between container and content. Although having home insurance is not mandatory, it is highly recommended. The owner of the house must take care of the continent. That is, you can take charge of contracting an insurance that covers physical issues of the building: the walls, floors, ceilings, pipes. However, if you are living in that house, it is most likely that you have your belongings inside. In the event of a possible theft, the previous insurance will not take care of your objects. To avoid this situation, the best thing you can do is take out your own insurance to cover the contents of the house. This insurance would have to be paid by the tenant, in this case you, and not the homeowner.

Review the conditions before hiring the insurance

If you have decided and want to take out home insurance, the first thing you should do is check the coverage conditions. As we anticipated, it is basic so that you can know what you can or cannot claim. In the policies you will find all the detailed information of the things that the insurance will cover or not. There are a lot of situations that insurance could cover you: dampness, breakage, theft. but there are also others that you probably don't know about and that, depending on which cases, can come in really handy. Next, we highlight what they are :

  • Do you have small children? Well, look carefully at the conditions of your insurance because most have a section known as family responsibility. This can cover, for example, if your child breaks something in a store. The insurer will take care of the damages to third parties that have been caused by any of the family members (who live in that house).
  • Some insurers, such as LĂ­nea Directa, have established a leisure and alcohol service. That is, you go out for a drink and the night is long. You've been drinking and you can't drive. You can call your insurer. A tow truck will take the car to your house and both you and the people who accompany you will get home by taxi, expenses paid.
  • Others, instead, focus on more basic questions. Mapfre knows that not all people are handymen and assembling Ikea furniture is not what they do best. If this is your situation, you should know that this company has a policy that helps the insured with assembly and DIY issues. The help you've been wanting!
  • Are you going to travel abroad? Check your policy beforehand as many insurances include travel assistance. If, for whatever reason, you have to use the health care of another country or return to your country, the insurer will take care of the expenses. Without a doubt, an incredible help that will make you feel more confident.

Home insurance: what kind of policies are there?

There is specific home insurance for each home (and for the use that is given to it).

If you are looking for home insurance or are thinking about changing companies, by now you will have realized that there are different types of policies, depending on the risks covered. To find the one that best suits your protection needs and the characteristics of your home, we recommend that you continue reading this guide, because we are going to go into detail about the different types of insurance with which you can protect your home.

Types of home insurance

Although within each type of home insurance we can find a very large number of modalities and versions (depending on the use, type of house, etc.), in general terms we only talk about three types of home insurance:

Damage policy

It is the most basic policy that can be contracted. If you are paying for your home thanks to the fact that the bank granted you a mortgage (that is, it advanced the money necessary to acquire it through a loan), you know what we are talking about. And it  is mandatory -by law- to have a damage policy for you to be granted a mortgage loan. But what does it include? Basically, it protects the structure of your home in case of fire; what is known as the home continent.

In the event of an accident and your home is destroyed, the insurance company with which you have contracted your policy will be in charge of dealing with the outstanding debt with the bank. In addition, if the amount owed to the bank is less than the value assumed by the insurer (the guaranteed capital), once the debt is satisfied, it would have to deliver the remaining amount to the insured.  As with any insurance, the conditions (financial limits, available guarantees) may vary from one company to another.

Multi-risk policy

Normally, the multi - risk policy covers what is called the continent (housing structure) and content (goods, furniture and furnishings containing housing). They also include Third Party Liability as basic coverage, although there are companies that extend this guarantee to other areas, such as family, work or even that which may be required of pets. The risks usually contemplated are fire, water damage, electrical damage, atmospheric phenomena, theft, aesthetic damage and a long etcetera.

But not all of them are that generous in their coverage. And you must be clear that there is a great diversity of modalities of this type of insurance. That is why on many occasions some of the aforementioned coverages can be contracted independently; it will depend on the flexibility of the policy. The type of home (rental, vacation, etc.) also determines the offer in multi-peril home insurance. There are companies that present differentiated products for each type of home, including specific coverage.

Loan repayment policy

A loan repayment policy is nothing more than life insurance. Of course, linked to a loan (mortgage or personal). An amount equivalent to the debt is guaranteed. The insured capital decreases as the years go by and part of the loan is amortized. The idea is that, in the event of death or permanent disability, the family can assume the remaining amount. A fixed amount can also be guaranteed, so that once the debt with the bank is paid, the beneficiaries can receive a part.

When a bank has granted you a mortgage, it is not mandatory to take out this type of policy. However, it may be advisable to anticipate certain situations that we would like to avoid, even if it is not possible. And that both you and your family are protected in the future against any scenario.

These types of insurance are generally quite basic. The usual thing is that a capital is guaranteed in the event of death as a basic guarantee and permanent and absolute disability coverage is offered as optional. But you can also discover in this sense some variations between the offers of the companies that have loan repayment insurance. It is not as popular an insurance as multi-peril insurance, so the offer is smaller.

Recommendations before, during and after buying this insurance

Insurance companies offer a wide variety of home coverage options, at different prices. Before purchasing insurance, it is recommended to review the options that exist in the market and choose the one that best suits your needs.

Some of the policies expressly indicate the coverage covered while others operate by exclusions, that is, they cover everything that is not specifically excluded. It is recommended to read the policy carefully, know the value of the deductible (the part of the loss borne by the insured) and verify with the insurer the coverage and exclusions.

In the event of a loss, all possible measures must be taken to prevent the spread of damage. Among these measures is the call to emergency care authorities (firefighters, civil defense, etc.). The occurrence of the event covered by the policy must also be reported to the insurer as soon as possible.