The first true home insurance, or what was called “Homeowners Policy” at that time, was developed by the Insurance Company of North America. It was formally filed with the Insurance Department of Pennsylvania on August 11, 1950.
More than 60 years have elapsed since, and today Homeowners Insurance has evolved a lot. Getting to know the key features of a policy is vital before you buy one.
Here are some basics about homeowners insurance that all need to know.
About Home insurance
A typical home insurance is a package policy that provides financial protection against disasters. In effect a standard policy insures your home and all the things you keep in it.
What does a standard policy cover?
A standard homeowners insurance policy covers the following:
*The structure of your home.
*Your personal belongings.
*Financial assistance if you are unable to stay in your home because of a disaster.
What types of disasters are covered?
Most homeowners policies cover disasters like explosion, fire or lightning, storms, riots or civil commotion, vandalism, theft, and damage due to falling objects. But, disasters like floods, earthquake, and maintenance damage are not covered.
Can you own a home without insurance?
Yes you can. But if your home has been financed with a mortgage, your lender in all likelihood will ask you to get an insurance coverage.
Is there a difference between cancellation and nonrenewal?
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Yes there is. Insurance companies can cancel your policy if you fail to pay the premium or if you have committed a serious fraud. On the other hand, nonrenewal is different. When your policy expires, either you or the insurance company decides whether to renew it or not. Generally, the conditions stipulate that the insurance company must give you specified number of days’ notice with reasons for cancelling the policy.
Even after knowing the basics, finding good homeowners insurance companies these days is no cakewalk. Unfortunately, insurance companies do not seem to be protecting homeowners the way they used to. Many are refusing to write new policies in susceptible areas and cancelling some to shore up their bottom lines.
Here are a few helpful tips for those who are looking for new homeowners insurance coverage.
If you insurer is refusing to renew your present policy, it is no big deal. There is still competition around. Your state may have scores of insurers of whom you are not aware. Even if you live in an area that is disaster prone, there are good chances that the state has a joint underwriters program or insurance pools to help people who cannot get coverage.
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