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Home
insurance,
also commonly called hazard insurance or homeowner's insurance (often
abbreviated in the real estate industry as HOI), is the type of property
insurance that covers private homes. It is an insurance policy that
combines various personal insurance protections, which can include losses
occurring to one's home, its contents, loss of its use (additional living
expenses), or loss of other personal possessions of the homeowner, as
well as liability insurance for accidents that may happen at the home or
at the hands of the homeowner within the policy territory. It requires
that at least one of the named insured occupies the home. The dwelling
policy (DP) is similar, but used for residences which don't qualify for
various reasons, such as vacancy/non-occupancy, seasonal/secondary
residence, or age.
The
home insurance policy is usually a term contract-a contract that is in
effect for a fixed period of time. The payment the insured makes to the
insurer is called the premium. The insured must pay the insurer the
premium each term. Most insurers charge a lower premium if it appears
less likely the home will be damaged or destroyed: for example, if the
house is situated next to a fire station; if the house is equipped with
fire sprinklers and fire alarms; or if the house exhibits wind mitigation
measures, such as hurricane shutters. Perpetual insurance, which is a
type of home insurance without a fixed term, can also be obtained in
certain areas. |
