Homeowner’s insurance is a package-policy that offers coverage against a number of eventualities. Not only does insure against damage to your home, but it also offers protection against loss, damage or theft to your personal property and can also offer insurance against your personal liability. Typical homeowner’s insurance also offers insurance for attached garages and detached structures on the property such as greenhouses and summerhouses. It is always worth checking the finer points of your homeowner’s policy to check whether things like personal liability are included or whether they require a further premium. The theory behind homeowner’s insurance is that, as your home is likely to be the largest single investment you make, you should do everything possible to protect it. Many mortgage companies will not offer loans unless the homeowner’s policy meets their standards.
Tenant’s insurance is a slightly different business. These policies do not cover damage to the building, as this is the responsibility of the landlord. After all, it is the landlord who has a vested interested in the structure itself. As a result, the tenant is only held responsible for their personal belongings and personal liability. Tenant’s insurance also offers coverage in the event that someone has is injured on the rented property as a result of the tenant’s negligence.
Compared to homeowner’s insurance, tenant’s insurance premiums are often considerably lower. This difference reflects the capital and assets that each party has to lose in the event of damage, loss or theft. In addition, statistics show that a homeowner is far more likely to have children on the property than a tenant, which increases the risk of damage or accident.
Different insurers offer different premiums, perks and incentives to court custom. The key to find the right insurance for your circumstances, whether you are a tenant or a homeowner, is to research the type of insurance you need and get estimates from a number of insurers. You should ensure that each estimate you get is for exactly the same coverage. This way you can be sure that you are getting a good deal. If you want extras included in your policy, such as full replacement of stolen or damaged goods, then you need to ensure that this coverage is offered in all the policies you consider. The slightest difference between the levels of cover will mean that you do not get an accurate result.
The Internet has made finding the right insurance policy easier than ever before. Online comparison websites are a useful tool for anyone looking for insurance of any sort. They work by assimilating the key points of huge numbers of insurance policies and displaying them alongside each other, so that consumers can quickly see which policy is the most suitable for them.
However, choosing an insurance policy is not entirely in the hands of the consumer. Insurers take a variety of factors into consideration when deciding whether you are suitable for insurance. Insurance of any form is determined by assessing the risk you pose to the insurers as a borrower. It used to be the case that homeowners or tenants with poor credit ratings were turned away or offered policies with much higher premiums. Before you search for a policy, it is worth checking your credit score and, if it is poor, you should take steps to improve it. Insurance is there to offer financial protection, but insurers prefer to offer coverage to those who are likely to uphold their responsibilities.
About the author
Get the latest on home insurance and other home finance arrangements in this series by Mark Bartley.