Property insurance is a broad category of insurance that provides financial protection for physical property and assets. It covers losses or damages resulting from various events (often called “perils”) like fire, theft, storms, and more. Here’s a breakdown of its key aspects:
Types of Property Insurance
-
Homeowners Insurance:
- For homeowners, covering:
- Dwelling (the house itself)
- Other structures (detached garage, sheds)
- Personal belongings
- Liability (lawsuits due to injuries on your property)
- Additional living expenses (if your home is temporarily uninhabitable)
- For homeowners, covering:
-
Renters Insurance:
- For tenants, covering:
- Personal belongings
- Liability
- Additional living expenses
- For tenants, covering:
-
Condo Insurance:
- For condo owners, covering:
- Interior of the unit and personal belongings
- Liability
- Additional living expenses
- For condo owners, covering:
-
Commercial Property Insurance
- For businesses, covering:
- Buildings and structures
- Business equipment and inventory
- Loss of income due to property damage
- For businesses, covering:
Commonly Covered Perils
- Fire and smoke
- Lightning
- Windstorms and hail
- Theft and vandalism
- Water damage from burst pipes (sometimes other water sources)
- Falling objects
- Weight of ice and snow
Exclusions
- Standard policies don’t usually cover:
- Floods (requires separate flood insurance)
- Earthquakes (requires separate earthquake insurance)
- Normal wear and tear
- Acts of war or nuclear events
How it Works
- Choose a Policy:Â Select coverage and limits based on your assets and risk level.
- Pay Premiums:Â Pay regular premiums to keep the policy active.
- Loss Occurs:Â File a claim with your insurer if a covered event damages your property.
- Assessment:Â The insurer determines if the damage falls under your policy.
- Payout:Â You may receive:
- Replacement cost: Value of new, similar items
- Actual cash value: Value of items minus depreciation
- You might have a deductible to pay first