Before we take a look at the differences between the two insurance policies, let’s consider a few relevant scenarios:
- A beginner-level driver tries to make a U-turn and baammm… hits your fence. A large portion of it crashes down.
- You return home from work and find that your tenant’s laptop is stolen because the security guard left the gate unlocked.
- You come home after a week-long family vacation and find that water leakage has damaged your kitchen appliances.
Who is responsible for the loss? How will you protect yourself from severe financial loss during such situations?
The best answer: Get homeowners insurance.
HOMEOWNERS INSURANCE POLICY
This is the single most important insurance policy that every homeowner and tenant must have.
Let’s face it! Anything related to accommodation is a huge investment – be it building, buying, leasing, or renting a home. In addition to that, there is much more money involved in the house in the form of expensive items such as jewels, Laptops, and home entertainment systems. So what do you do to protect your home and belongings during such unexpected accidents?
The best option is to purchase homeowners insurance policy.
The reason why it’s beneficial for homeowners is, it protects your house from unexpected damages (caused due to fire, flood, rain, or snow). You get the best of both worlds when you choose a policy that provides adequate coverage to the most expensive items in your house.
For mortgage loans
Also, homeowners insurance is an absolute necessity if you wish to avail mortgage loan against your home. The financial institution (that lends you money) wants to ensure that your house is insured and protected against any accidental damage or theft for the present and the future. Even if your abode is severely damaged, your lender might want you to settle your monthly payments as specified in the agreement. When your home is insured, your debts are taken care of by your insurance company in the form of compensation. That in turn saves you from a great deal of stress and huge expenses.
HOUSEHOLDER INSURANCE POLICY
Householder insurance policy is actually different from homeowners insurance. It covers only the content of your home against theft, fire, flood and storm but not your building. I.e. it only protects your belongings. Yet it’s the best insurance policy for people who live in areas where there are frequent issues of theft or natural calamities. Anyone who fears damage to his/her properties will find the best help with householder insurance policy.
People who usually avail this insurance are tenants because most homeowners prefer homeowners insurance policy and not this one. Most insurance companies will cover damages caused due to burglary, fire accident, water leakage, flood, and snow. The content usually covered in their policies include jewelry, washing machine, TV, AC, furniture, and laptops.
By the way, please keep in mind that, in case of jewelry and other expensive items, you might not get full compensation but most of it, depending on the insurance plan you’ve chosen. Still, that helps to a great extent during major theft or damage to your properties.
Please keep in mind that these are not covered by your Homeowner insurance policy.
QUICK RECAP
Homeowners insurance policy protects the home whereas Householder insurance policy provides coverage for the belongings. The former is the best choice for homeowners whereas the latter is ideal for tenants.
