If you feel the pride in owning your own home, you should hold on to it. It takes years of work and toil to build a place you call your own. It’s precious and expensive. You decorate it. You buy the best of furniture. It’s a place you exhibit with pride. It is your abode for a lifetime. But why just your house? Your office, workshop or any other property you own is just as invaluable. So, protecting them and everything else in it that you hand-picked to make it your space, should come with just as much zest.
The answer to protecting your property is- insurance. Most people confuse home insurance with property insurance. They are two different entities that are offered by insurance companies to compensate financially in the event that property owned by you is damaged or its contents stolen or destroyed due to fire, theft or natural calamities.
Apart from the similarity that both home and property insurance are available to homeowners or landlords, they offer different benefits and covers holistically.
Home insurance protects your home from financial losses, providing cover for damages to your house specifically, caused due to natural calamities or man-made threats. While property insurance covers risks to your home and other kinds of real estate such as office, factory, garages, workshops, boat and other automobiles due to threats and perils such as fire, theft, and weather damage.
Home Insurance can come with covers such as Home contents insurance, Personal belongings cover, appliances cover, alternative accommodation, movable belongings cover. While property insurance can be branched out to more specific forms related to the building structure such as fire insurance, homeowners insurance, flood insurance, earthquake, home, and boiler insurance. Home insurance is a part of property insurance.
What happens in case of your home- whether it is a house, condominium, villa or an apartment, is damaged due to fire, floods or leakage and needs repair? Do you know that if you don’t have homeowners insurance backing you, your finances can take a dip considerably? That is where home insurance policy provides the funds needed for repair and replacement of your home and belongings. On the other hand, property insurance either compensates you either for the actual value of the damage occurred or for replacing the contents and structure.
The one thing insurers overlook is third-party liability cover under home insurance. But this one is more imperative than you expect it to be. One of the major benefits of Homeowners insurance is- liability. In simple terms in the event of a visitor sustaining injury or damage to their property while on your premises, home insurance covers for the liability you face towards them. As far as property insurance is concerned, a standard property policy does not come with third-party liability cover unless purchased separately.
Your home building is covered, but what about everything it entails? A huge amount of sweat and toil goes into putting every piece of furniture together, every painting, every mirror, every bit that has an emotional value attached. Your personal belongings too! The expensive watch gifted to you or a vintage painting handed down through generations- these are precious things, and your home insurance policy will cover all these contents.
But your property insurance will not cover for the contents within the property premises. You will need to add this coverage separately.
Another benefit, and one of the most important to consider, that home insurance extends is alternative accommodation. This feature reimburses you for an alternative place to live while your house is being repaired or reconstructed if damaged due to a peril covered in your policy. Property insurance does not cover this expense.
Most people opt for homeowner’s insurance as it is more holistic in nature. Usually, home insurance covers all perils- that means it protects against all calamities such as fire, floods, earthquakes, and/ or man-induced perils such as theft. But property insurance compensates for damage due to only those perils which are specifically named in the policy.
Notwithstanding that, it is still advisable to read the fine print carefully and confirm what perils are included.
Now that the difference is clear, picking the policy that covers your home or any other property according to your budget and coverage needs, will get a tad bit easier. So, get researching and make everything you own an asset.