Types Of Home Insurance
 Posted By | Mar 24, 2008

You need home insurance. Which one do you really need?

Please insure your house immediately after buying it. If you're building your house, insure it when you start the roofing. Besides taking care of the building, the contents of your home must be protected too. Burst water pipes, fire and damage from theft are some of the calamities that insurance can protect against. While it cannot replace damaged buildings or lost items nor relieve you of the stress that these tragic events can cause, it can prevent total loss of your property by reimbursing you financially.

Sometimes, insurance is mandatory, such as when your house is financed by a bank. You should also take up a mortgage life assurance policy to protect your family from financial burden if something happens to you. In the event of death or total disablement, the insurance company will settle your loan in full for you.

Mortgage Life Assurance can be divided into three areas:

-> Mortgage Reducing Term Assurance (MRTA) ensures that your family won't have to pay your loan for you if something happens to you. Your bank may offer extra financing to cover the cost of the insurance premium. The repayment for this premium is spread over the period of the loan tenure.

-> Overdraft Life Assurance gives you an overdraft credit limit, which you may withdraw in any amount at any time. You're insured for the full amount of this limit even if you use only part of it. However, you'll need to renew your policy every year at the time your overdraft is renewed.

->With the Mortgage Endowment Plan, you pay your housing loan interest + an insurance premium every month. At the end of your loan tenure, the insurance company will pay the full capital sum of your loan to your bank and any cash bonuses to you. However, this bonus is not guaranteed; it depends on the insurance company.

Houseowner/Householder insurance protects you against calamities such as:

-> Natural disasters: fire, floods, lightning, typhoons, hurricanes, windstorms, cyclones, earthquakes and volcanic eruption.

-> Man-made disasters: theft, riots, explosions, strikes, damage from malicious intent, damage from impact, aircraft damages, burst pipes and water damage.

-> Loss of rent

-> Public liability

-> Other household predicaments, removal of household content, accidental breakage of mirrors, personal accident, even loss or damage to clothing and personal items of domestic servants.

Source: http://www.memylife.com/MyHome/mh_articleLevel.asp?Category=15&Article=60&Name=Home%20Insurance

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