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6 Things You Should Know About Property Insurance

The insurance industry is a vast and comprehensive one that covers quite a range of products. One of the most in-demand is what’s known as property insurance. This refers to the kind of insurance focused on protecting tangible goods like residential and commercial properties including all its equipment from theft, fire, and other unexpected peril.

know about property insurance

As you discuss your options with your insurance provider, you’ll be able to understand that property insurance is like all-encompassing coverage. It includes homeowners’ policy, flood insurance, earthquake insurance, and renter’s policy, among many others. Given the complexity of what property insurance does and doesn’t cover, it’s important to dig deeper to learn more about its ins and outs.

With that said, here are some of the most important points you should know first about property insurance.

1. It’s Also Shaped By Factors Like Home Price And Cost Of Rebuilding

The bigger and grander your property is, the higher your property insurance cost will be also. The reason behind this is that property insurance is also shaped by factors like the home price and the cost of rebuilding. A higher-priced home generally costs more to insure mainly because it also costs more to rebuild and repair.

Apart from the size of the home, other factors may also affect the price, and this include:

Type of construction;
Whether or not the home has special features;
Style of the home.

Get to know more here about the price difference according to the type of materials your property is made of.

2. Its Cost Is Greatly Shaped By The Property Location

One of the biggest factors that contribute to changes in the price of property insurance is the location. Depending on where you’re from, the property insurance expense might cost more than it would for others from another local area.

It's best not to compare rates with friends or family members from other states or areas. Rather, if you’re keen on purchasing a property insurance policy, it’s best to compare with different providers in your area. This is the best way for you to ascertain which provider offers the most generous rates, location-wise.

The main difference in the price according to location is the fact that some locations are more prone to natural disasters and theft than others. 

3. It’s Important To Have An Inventory Of Your Property

After disaster strikes, are you certain you can remember every single property you own? Mental stress can get to you and it’s not unusual to forget that some properties were lost during the theft, for instance.

When you file claims under your property insurance policy, the process usually begins with proving you own certain items and then verifying how much they’re worth. This is a process that’s easier accomplished when you still have those belongings intact. 

This process of taking an inventory of the items you own is a pretty straightforward one. It's as easy as going through each room in your home, one at a time. Then, take notes, photos, or a video recording of the personal items of value that you have. 

everything you need to know about property and casualty insurance


4. It Isn’t A Mandated Legal Requirement For Every Homeowner To Have

The third fact you should know about is that property insurance isn’t legally mandated for every property owner to have. The exception, however, is if your property is still under the mortgage. The lender will often require you also to take out a home insurance policy to protect that investment. 

Because having property insurance is overall protection for your hard-earned assets, it’s always the better approach to still have one. Even when you don’t think you need it and even when your property isn’t on the mortgage, it’s an added plus to have coverage protection.

5. It Usually Comes In Two Types

There are two types of personal insurance you can purchase. These include:

Replacement cost: With this kind of policy, you have coverage that pays for the dollar amount needed to buy new items at the time the claim is made.
Actual cash value: Under this type, the policy has to factor in certain elements like depreciation for reimbursement on the items lost during the time the claim is made.

6. It Usually Covers Six Items

Property insurance has six types of coverage. These are:

Dwelling: This covers home damage, including its attached structures like a porch.
Other structures: This covers other stand-alone structures within your property like a shed or a fence.
Personal property: This covers repair or replacement for belongings that are stolen and damaged under covered events.
Additional living expenses: This refers to the coverage needed for living expenses while your home is still being repaired.
Liability: This coverage pays you if you cause injury to someone else during a covered event.
Medical payments: This coverage pays to treat someone injured on your property, regardless of fault.

Conclusion

When putting together all the information you’ve gathered from above, it’s easier to understand now that property insurance covers every personal item you own. The main purpose of your property insurance is to give you enough coverage to help with the expenses related to repairing or replacing any of your belongings after a covered loss. No one knows when unexpected peril happens, so it’s always best to be proactive.