For individuals who purchase a home and thus have housing liabilities, should they use a home insurance scheme as protection or increase their life insurance coverage ?

It depends on which is cheaper, as simple as that. (if your financial situation is complex, it becomes complex, like buying multiple properties).

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Do your comparison since both work the same, though life coverage are more flexible than home insurance (since home insurance pays off the housing liabilities, and terminates once your property is fully paid, while life insurance can be continue for another property or other purposes for dependents).