What types of home insurance should I consider?

Home insurance, often also referred to as hazard insurance, home-owners insurance or, in the industry, HOI, is intended to protect you financially against damage that might happen to your home, from fire and flood to accidents and criminal activity. It is intended to cover the replacement cost of your home and, with some policies, its contents. When shopping for insurance, ensure that you are familiar with the replacement cost of your home (this could be more than it would cost to buy a comparable home) and read the details carefully to ensure you will not be under-insured if the worst happens. For example:

• Are the contents of your home covered? To what extent? For example, are you covered to buy new replacements for lost or damaged items or only to buy replacements of equivalent age to the originals.
• If you must rebuild your home, are you covered to bring your home up to current building codes?
• Are special articles you care about like art, jewelery, computers, electronics and photographic equipment covered?
• Does your policy cover 'loss of use' - the cost of living somewhere else while your home is repaired or rebuilt?

Note that certain catastrophic disasters like earthquake and flooding are typically not covered by standard homeowners policies. In the event that these events are realistic concerns, separate policies must be taken out to cover you against these risks.