Everything You Should Know About Real Estate Insurance

Insurance is a type of “subscription” where you pay a monthly fee called an insurance premium. In return, the insurance company covers the costs of possible emergencies. Although it’s a quite common concept, according to a recent survey, 72% of America’s homeowners don’t exactly understand what house insurance is.

Home insurance protects you from the damage you may face as the owner or the tenant of the premises. It covers the material losses after unforeseen events like fire, theft, flooding, etc. For example, if you flooded the neighbors or damaged something in the house, the insurance company would cover these cases.

The insurance options vary from the smallest packages, which include barely anything, to the larger ones covering basically everything that can happen to the apartment.

What Can Be Insured

Home insurance is a type of property insurance that is voluntary in most countries.

It applies to any property you may live in, apartments in new buildings or bought in the secondary market, country houses, villas, townhouses, apartments, etc.

The most common type of property insurance is home and household contents insurance. Under this service, the apartment or house and usually the built-in furniture, such as kitchen furniture, will be insured. Some insurance companies offer to insure the so-called “box” (the house) and the interior finish separately, but most treat them as one unit.

Apartment or house insurance usually covers doors, windows, walls, floor, ceiling, plumbing and bath, heating, electrical and water systems, stoves, furnaces, etc. Check if the list includes built-in kitchen furniture, cabinets, and curtain rods. You should insure the above-listed items separately. Some insurance companies may also insure outbuildings (a shed or a fence) along with the dwelling. Also, for a certain amount,

home insurance can insure movable property, such as smart devices or bicycles, which you can take with you from home.


However, a home insurance policy usually only covers some inside things. You must sign a separate contract to insure other belongings in the house – like jewelry, securities, or indoor flowers. The insured and the insurer agree on what to insure against and what risks are in the concluded contract.

Insurance companies also offer the opportunity to insure household goods up to a certain amount, in which case the list doesn’t need to be made. The client can estimate the value of their home contents by themselves. As a rule, there is a minimum sum insured in this case.

What Property Is Insured Against

Insurers usually offer coverage against a variety of risks, which include:

– Natural disasters like fire, explosions, lightning, storm, hail, flood, rising water levels, ice drift, melting ice or snow, and damage caused by wild animals;

– Human-made damages like vandalism, burglary, robbery, destruction of technology systems, electrical accidents, falling aircraft or parts thereof.

Most often throughout the world, the property is insured against wind, hail, fire, flooding, or theft. Some insurers draw up a complete list of cases in which you will be covered — this is called a named perils policy. Anything not on this list is not considered insured.

The other coverage is called all-risk insurance. The insurer lists situations and risks in which the insurance indemnity will not be paid. All other incidents fall under the insured event. Make sure to determine first which type of policy better suits your situation and discuss it with the insurer alongside the boundaries of such policies. Some emergencies can only be covered partly – for example, flood damage may be reimbursed if it’s caused by broken pipes. If the reason was different, like a spill, insurers may not cover it.

Each company’s insurance terms contain a number of exclusions — these are cases that are not covered. The exclusions may vary from one insurance company to another. For example, storm damage to household property is often not covered if the house or apartment itself is not damaged. In the case of a robbery, the damage is not covered if thieves break into the premises using the original keys (unless the keys were stolen).

All the details should be spelled out in the contract and the appendix to the property insurance rules. Take your time signing the documents once you have carefully studied all the conditions.

Features of Insurance

Before choosing the right insurer company, you should familiarize yourself with its reputation and reviews and check the availability of a license, the contract, conditions, and current pricing policy. Suppose you’re buying or renting an apartment from a trusted and reliable company like Metropolitan Real Estate. In that case, the managers will have lists of insurance agents and companies you can entrust your home to.

Here is the list of things you must ask about and understand before signing the contract:

– What is the subject of insurance? Do you want to insure your house or apartment together with the interior decoration?

– What is the insurance amount? Ask the insurance company for their opinion on the fair insurable value of the object. Also, ask how the value of the apartment or house is calculated.

– What do you insure your home or household contents against? Pay attention to the insurance contract terms where all the risks and their descriptions are listed.

– Pay attention to the description of possible events that are considered insured events according to the contract.

– What are the concepts of risk in an insurance contract? A general concept can be described in the contract differently. Insurance companies may define the same concepts (insurance risks) differently, so be sure to ask about this in detail.

– Note the exclusions in cases where damage is not compensated or partially compensated. Risks that are not insurable are usually listed in the contract as exclusions.

In case of the insurance event, you must present documents confirming ownership of the home, passport, TIN, and the documents to receive the payment. In addition, indicate that the documents stipulated during insurance registration may be required.

What Does the Cost Depend On?

According to a recent analysis, the average cost of homeowners insurance in the USA is around $1,850 per year. The insurance cost usually depends on many factors:

– Type of property

– Owned or rented housing

– Market price of housing

– Insurable risks

– Availability of the franchise

– Insurance company rates

– Insurance value and term, etc.

The choice of the insurance company plays an important role because each insurance company’s rates and basic interest rates are different.

Here are a few tips on determining the possible insurance costs for your apartment:

– Determine what you want to insure — a house structure or all the belongings as well.

– Learn about the risks you can insure the property against.

– Calculate the approximate amount of house value, including the inside belongings.

– Check if your area has higher natural disaster risks.

– Use online calculators to determine the insurance amounts.

– Talk to a few agents before deciding on the right choice for you.

Although getting insurance might be pricey, you can be confident that you won’t be dealing with the problems on your own if something happens.

About alastair walker 10593 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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