Insurance is the act of, or the business or the system of, insuring. Therefore, home owner insurance is a kind of an assurance, a deliberate device to indemnify or give guarantee against a loss. By this, the repayment or the reimbursement is made from a fund to which a number of individuals or companies pay into for covering the same type of risk.

Many individuals make a premium by giving a small amount of money for the security of their respective homes and apartments. This way, payment for an individual does not fall heavily on the insurance company. The money submitted by the individuals is channelized to make up the loss incurred by the particular individual. The idea is that a particular payment, when divided among many, does not fall heavily on the actual loser. It is a concept based on cooperation.

Home insurance provides security for the various kinds of losses that one