The four main types of insurance listed below are the most common types of home insurance.
Buildings insurance covers the physical structure of your house: your walls, garage, the roof and all permanent fixtures. Most banks require you to have some kind of buildings insurance coverage before you get a mortgage.
Contents insurance covers everything inside your home. If there’s a fire, flood or theft, your contents insurance payment will allow you to replace whatever you lost. Be sure to give a an accurate estimate when the insurance company asks how much your belongings cost. Underestimating the cost of your belongings will give you a cheaper monthly premium bill, but if something happens and you lose all of your belongings you will only be partially compensated by the insurance company.
As a landlord, you are legally responsible for maintaining your building. Landlords’ insurance will cover you in the event that one of your renters damages your property.
One of the best things about renting is that you don’t have to worry about maintenance costs or damage. You do, however, have to worry about your personal belongings. Tenants’ insurance will cover the cost of your stuff if something happens to it. Tenants’ insurance plans are popular with students and people living in a shared house. Keep in mind that the more roommates you have, the higher your premium will be. If you only own a few valuable things, though, most tenants’ insurance plans are very cheap.
Now that we’ve covered all the basics let’s move on to rarer, more exotic types of of home insurance.
Holiday home insurance
A few lucky individuals own a second home, which they use to get away during periods of extremely hot or cold weather. People who own a second house must take out special, slightly more expensive types of home insurance. The added cost makes sense. If you only visit your second home every once in a great while, it’s easier to rob– that’s why the costs to insure it are a bit higher compared to normal home insurance.
Insurers don’t feel comfortable insuring strange kinds of houses, so the cost of this type of insurance is higher compared to normal insurance. If you built your house yourself out of odd kinds of materials, you’ll need to get a different type of home insurance called non-standard construction insurance.
High-value home insurance
If you have a very expensive kind of house or lots of expensive belongings, you’ll need to get a special kind of insurance called high-value home insurance. High-value home insurance is just like normal home insurance except that you get much higher payouts if something happens. Premiums, of course, are also much more expensive compared to normal types of home insurance in Nigeria.