Companies also seek to transfer this risk to other companies that offer covers that are relevant to their mode and or area of operation. Insurance of whatever nature is sold by an insurance company also referred to as the insurer and the person purchasing the insurance is known as the insured. The rate of premium that is charged depends on the items insured. The cost, the location and the value of the items is considered before the insurer can proceed to insure the property. Therefore, a valuation of the property that is to be insured must be carried out to ensure that the right policy is taken by the insured and to ensure that the right premium is charged for the cover.Once a policy has been agreed upon then the company and the policyholder get into a binding legal agreement that guarantees the clients property is covered regardless of the damage incurred depending on the insurance cover taken. Some insurance policies, however, only cover certain types of damage and omit others as far as home insurance is concerned. This type of damage may include natural disasters like floods, hurricanes, wild fires and so on. On the other hand, there are policies that do indeed cover these types of calamities.For the insurer, the policy guarantees that the monthly premiums are paid on time to activate the insurance cover and to maintain it. A point to note is that the more expensive the item to be covered the higher the premium. This varies from company to company, as does the policy of the cover. Home insurance is important because this gives the owner of the home, be it a rental or the persons own property, peace of mind in knowing that in case of any form of damage, whether a natural disaster or otherwise, their property is protected. The insurers usually determine the value of the home and any other assets to be covered, whether an outsourced surveyor or an in house one and the appropriate cover is suggested.These covers vary in duration and in the types of items covered. As such, the policy could have premiums that are paid yearly, monthly or even annually. Either the cover could be limited to the structure of the house itself or it may include some or all the items in the house. The cover in some cases could include the people living in the house, the pets, and even any of the guests that are present in the house at any given time. All these additions have a great impact on the premium cost. They may be included in the total cover charge or they may be charged separately. The choice of cover is left solely to the insured and what type of insurance best suites their needs and covers their insurance needs.