Homeowners Insurance is an insurance coverage policy for your home. It basically covers all sorts of damage to your house and the possessions inside it. Different types of home insurance can be bought by homeowners depending on their needs. Home insurance policies can vary in terms of their coverage and premium costs. Highly reputable companies may have higher rates as compared to those just starting out in the industry. Let’s discuss the components of home insurance in more detail.

What is covered? An extensive home insurance policy will cover costs of damage from natural disasters such as volcanic eruptions, earthquakes etc. Furthermore damage from fire, theft and vandalism is also covered under a good policy. In case of damage you can make claims and have repair work done instantly.

Types of Coverage

There are three main types of home insurance coverage that you can avail as a homeowner. Actual cash coverage is the first type of coverage. It will cover the value of your house and your personal belongings after their value has been depreciated. Secondly we have the replacement cost coverage. In this type of coverage you are paid the actual cash value of your property and belongings without including any depreciation. The last type of coverage that you can get is known as guaranteed replacement cost coverage. This coverage also has the highest premium of the three but it pays for any sort of damage to your home even if it exceeds the policy limit.


Now that you know the few basic components of home insurance it’s time to go out and select a reputable and well known insurance company. You should shop around and not just go for the very first company that you come across. Compare rates and service quality of each company before making any decision.