What is the Importance of Property Insurance?
Most people usually overlook property insurance, but it is as important as the other forms of insurance. When you have an expensive property, one thing that you must consider is getting it insured. Your property is the product of your hard work. It is just logical to make sure that it is protected from unforeseen losses and damages.
Property insurance is a form of insurance that offers protection to your property–your house and its contents. When you get property insurance, you agree to pay a certain amount to the insurance provider to assure that it will bear the burden of losses that might occur in the future.
Your residential property is one of your most valuable assets, if not your only asset, and it must be protected. These are several reasons why you should get property insurance:
- It offers maximum protection against risks of loss
- It gives the property owner peace of mind
- It prevents unnecessary expense in case of untoward damages
- It compensates damages
- It keeps your finances safe
The Benefits of Property Insurance
Having your property insured is one wise decision to make. Based on studies, the importance of property insurance is worth the amount that the property owner will pay for it.
When one considers the damages that will be incurred, the premium is a small price to pay. Nobody knows what the future holds; accidents and disasters happen. Especially in the condition of our world today, climate change and the worsening natural disasters pose grave threats. Property insurance takes care of these uncertainties.
Here are some of the major benefits of getting a property insured:
- It Offers Maximum Protection
The number one function of property insurance is to cover all the losses you have incurred due to uncertain risks that may cause damages and losses to your property and its contents.
- It Gives the Property Owner Peace of Mind
Suppose you know that your properties are well-protected from risks and dangers. In that case, you will never have to worry about the uncertainties of life. Whatever happened to your property, you are assured that the insurance company will take the burden of losses.
- It Prevents Unnecessary Expense
What if a windstorm occurs and your property was heavily damaged? What if thieves entered your house when you’re on vacation and emptied all your valuables? What if a fire caught your house? What if you don’t have extra savings when one of these happens?
These are possible scenarios that might happen. Without property insurance, either you will spend all your savings from repairing your house and restoring your valuables or live miserably with what’s left with your property. However, if you have property insurance, you don’t have to shell out unnecessary expenses because your insurance provider will reimburse your losses.
- It Compensates Damages
Depending on the type of your insurance and insurance provider, whatever damages that your property has incurred, you will be compensated. So, it is important that you know and understands the entire coverage of the insurance policy you are buying. As long as the loss is not due to your negligence, you will receive whatever amount that is commensurate with your loss.
- It Keeps your Finances Safe
When something unfavorable happens, your finances will be spared. Aside from some minor headaches and inconveniences from documenting and processing claims, you don’t have to worry about your finances.
Now that we have covered the importance of having property insurance, you need to identify which of your properties are to be protected. It can be either of the following or all of them:
- Physical structure or building
- Expensive pieces of jewelry and other valuables
- Household furnishings including but are not limited to the couch, tables, chairs, etc.
- Household types of equipment including but are not limited to gadgets, chandeliers, television, air-conditioning unit, etc.
Types of Property Insurance
There are 4 types of property insurance. They are the following:
- Homeowner’s Insurance
It is the most commonly purchased property insurance with the most number of claims.
- Commercial Property Insurance
If your business has a physical office, it is wise to acquire a commercial property insurance policy.
- Flood Insurance
Regular homeowner’s insurance does not cover damages or losses due to the flood. So, if your property is located in a flood-prone area, it is a must to get a flood insurance policy.
- Natural Disaster Insurance
Regular homeowners do not usually cover natural disasters such as hurricanes, tornadoes, earthquakes, and other types of inclement weather. Ask your insurance provider for other coverage of natural disaster insurance.
A homeowner’s insurance policy coverage may vary depending on the provider. However, they generally cover the following instances:
- Losses caused by fire
- Damages from hailstorm
- Explosion or smoke
- Theft or burglary
- Riot or civil unrest
- Damages caused by aircraft or vehicles
- Volcanic eruption
These coverage will more likely increase the price of your premium:
- Flood damage (separate policy)
- Earthquake (separate policy)
- Maintenance due to worn-out damages
- Molds, etc.
The standard homeowner’s insurance is divided into three coverage categories: Dwelling coverage, contents coverage, and personal liability.
- Dwelling coverage protects the home’s physical structure, which includes floors, walls, ceilings, built-in fixtures, appliances, and other attached structures.
- Contents coverage protects valuables inside the house, which includes furniture and clothing.
- Personal liability includes damage coverage such as bodily injuries, accidents, and property damage.
However, these are just the standard coverage. You can ask your provider for the customization of the insurance policy. It is better to identify your coverage that suits your specific situation, requirements, and lifestyle.