Home insurance 101: The different types of insurances for a homeowner
The importance of home insurance is unquestionable. Whether you are a homeowner or a tenant, you need home insurance to protect the property and the contents of your home. It also covers any liability claims as an owner or a tenant.
Often accidents and unexpected circumstances, such as fires, natural disasters, thefts, and others, can cause damage to a house. In such a case, a home insurance policy covers the cost of repair and refurbishing the house. In addition to this, an insurance company may also cover any injuries sustained by a person visiting your property or even damage to someone else property. In such a case, you are not liable for the damage. Hence, the insurance company provides you the finances to make your home livable again.
Depending on your current status (homeowner or tenant), the likelihood of natural disasters, and the size of your home (apartment, condo, two-story house, and others), there are many types of home insurance policies. Some of these are in the next section.
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Types of home insurance
The different types of homeowners insurance are as follows:
If you rent out your property to someone else, then you need a landlord’s insurance, also known as rental property insurance. This type of insurance covers the cost of property damage. Moreover, in the case of liability claims, this insurance covers the cost of that as well. If a tenant gets injured on your property, the landlord’s insurance will cover the cost of medical bills and such.
However, to obtain a landlord’s insurance, you need to qualify for it. Firstly, the property that you rent must be in a livable condition. Most landlords have their house on the mortgage. In most cases, rent payment from a tenant covers mortgage payments. If the tenant falls behind on their rent, insurance covers you. Hence, it is quite beneficial.
Tenant’s insurance is also known as renter’s insurance. If you pay rent, you require insurance as well. It is for the protection of your belongings in case of an accident. Items that are covered by a tenant’s insurance include clothing items, furniture, electronics, and other personal property. Moreover, it also protects you in case of liability for unintentional property damage. Insurance providers cover the cost of damage to items that do not belong to a tenant. On average, tenant’s insurance costs from $20 to $30 in Canada.
Condo insurance is for protecting an individual tenant’s property. The tenant of the condo requires condo insurance. It protects furniture, appliances, clothing items, etc. Condo insurance also covers the cost of living in case of damage to a condo. This type of insurance covers the personal items of the renter stored in a storage locker.
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Condo building insurance
Often people confuse between condo insurance and condo building insurance. These are separate and cover different aspects of damages to a condominium. Condo building insurance is for the condo owner and saves you from a lot of trouble in case of accidents and other unexpected circumstances. The condo insurance provides coverage for the common areas in the building, such as elevators, storage lockers, lobby, etc. It also protects a condo owner from liability for any damage to a tenant’s property and any injuries sustained by the tenant. However, condo insurance does not cover belongings and one’s personal property, except that of the condo owner. Different buildings require different condo insurance.
Having home insurance protects an individual from liability claims. Moreover, it provides financial assistance in case of accidents. With so many options to choose from, you should seek the help of a professional who can guide you regarding the types of home insurance and help you in your particular case.