There are many types of insurance on the market that promise to protect you and your loved ones from disasters and accidents. Life insurance and car insurance are both common types, although you may have also heard of property insurance, which we are talking about in this article. Since this is not the most well-known insurance, there is a chance that you will not know about this insurance in detail. So let’s try to clear things up for you by explaining some of the key factors in property insurance.
Definition of property insurance
Property insurance is like any other insurance you know. It is designed to cover the costs of the insured unit in the event of an accident or natural disaster. Property insurance deals with damage to your property. Your insurance will cover the cost of damage to your home in certain cases. An expert on tatil insurance explains that since it can sometimes cost a fortune to renovate a home, taking out this insurance is beneficial. Although, there are some things you need to know before diving into such insurance without worrying about anything. Let’s take a look at some of the key points.
We know that property insurance covers damage to your property, but do you really know which types of damage are covered and which are not? 1 in 3 people in the states are unaware of the actual coverage their property insurance provides. Many people misunderstand that insurance covers all types of damage, which is obviously not true. If this were the case, then all insurance companies would go broke within a few months after starting work.
There are some cases that are not covered by property insurance and these include:
- Floods – Damage caused by floods is not covered by common property insurance. There are different types of flood damage insurance.
- Earthquake . Damage to buildings caused by an earthquake is not covered by property insurance coverage. Repairs in connection with such incidents must be carried out by the owners themselves. So, let’s say that if your building forms a huge crack during an earthquake, it won’t be covered by your regular property insurance. There are other types of insurance that you can get to be protected from earthquakes.
- Maintenance problems. Damage due to negligence will not be covered. Without proper care, everything can fall apart. Electrical wiring, rusty pipes, leaking ducts, etc. are not covered by common property insurance.
The essence of these insurances is that any sudden accident or accident that could not be avoided must be covered. Thus, things that happen slowly, such as pipe leaks due to low operating costs, are not covered.
Actual coverage includes incidents that you would not be able to control. These are mostly sudden accidents or accidents that damage your property. Below is a list of things you can ask your insurance company to cover:
- Explosion – Any type of explosion such as a gas cylinder explosion or any other type of explosion that damages your home will be covered.
- Fire – Fire caused by gas leakage, lightning strike, etc. will be easily hidden.
- Theft. Theft is very common all over the world, and it can completely drive a person out of themselves. Fortunately, theft is also covered by the most common property insurance policies.
- Volcano. Damage caused by volcanic and other eruptions can be fatal to homes. Property insurance covers such cases of damage caused by eruptions.
- Riot – Riot had to be covered by companies due to significant damage to people’s homes. Large crowds often leave behind the destruction of private property.
- Plane crash or car crash. It’s not very common to see a car crash into a house, but it’s still quite common when you compare it to a plane crash. Yes, planes crash into houses from time to time. If not an entire plane, then even some wreckage can cause a lot of damage to your property, which is usually covered by insurance.
Apart from simply covering damage to your home, there is another benefit of property insurance called liability insurance.
Liability coverage is very important and is best explained with an example:
So, let’s say you went on vacation and forgot to turn off the tap in the toilet. Water damage from a leaking faucet reaches your neighbor’s wall, damaging most of their property. Your neighbors can sue you for this and force you to pay very heavy fines for repairs. You can just go broke paying such huge fines. Although, if you have liability coverage, then the insurance company will take care of such payments.
Other things to look out for
There are many people who have businesses in their homes. This does not include places like the office, but it does include customer service garages and other workshops where physical work is done. Such areas within the home are not covered by simple property insurance. To get coverage for these locations, you will have to apply for commercial insurance.
Another thing that you need to pay attention to is that you should not leave your home unoccupied for more than 30 days, as this can lead to the cancellation of your insurance policy. This is simply because leaving a home unattended for long periods of time can make it highly susceptible to damage such as water leakage, fire, or theft. At the same time, insurance companies simply cancel such policies. To cover such properties that remain unoccupied for a long time, there are other types of insurance that you can apply for.
Arts and Jewelry
Art and jewelry are usually insured after you add a “float” to your base policy. Expensive art and jewelry may be insured, but such policies have a limit on the amount of coverage you receive. So make sure you ask your agent about a cap on these covers.
The points about co-insurance are a little tricky to understand. These are basically some of the points in politics that come into play in a certain situation. The situation that usually brings us to this point is when the owner asks to insure the property for the amount he paid for it. In such situations, the insurance company may ask you, as the owner, to split the cost of the repairs. Amounts are based on the price you paid for the property, compared to the price at the time the policy was signed.
Raising the premium
A property insurance premium works just like any other insurance premium. The higher the risk of activating the insurance, the higher the premium charged. Thus, there are many factors that can put your property at risk and increase the amount of premium you pay for insurance. If you live in an area prone to floods, hurricanes, tornadoes, volcanic eruptions, or similar natural disasters, your allowance will be high. Your allowance may also increase if you have a dog, smoke, or have a pool.
Property insurance may sound simple, but it is very complex. You must know every detail before applying for insurance. You need to know what these insurances cover and what they don’t. Knowing all about them will help you better deal with them in the future.