Importance of Property Insurance
Insurance is a huge part of lives today. From the smallest, to the largest asset - insurance has become a necessity. We insure our phones, our holidays and most other gadgets come with insurance so how can we not insure our immovable properties which are one of the most valuable assets that one can invest in. The importance of property insurance cannot be stressed on enough, as it is extremely important to make sure that your property is safe and secure against a lot of mishaps. It is a safety measure that one must take to ensure that they have something to rely upon in times of distress that may occur due to damage to property.
Here is everything you need to know about the importance of property insurance.
What is property insurance?
Property insurance is an insurance that provides coverage for a building structure or structures and its contents against natural or manmade calamities. The coverage provided by the property insurance is not fixed and often varies depending on the type of insurance taken and the needs of the consumer.
How can one get property insurance?
Property insurance comes as a written contract called a policy. It is a legal document that binds the policy holder and the insurance company. The policy holder should pay a certain amount called the premium to the insurance company in exchange of which the company assures to pay for certain damages that may occur to the building. The kinds of damages and losses covered will be elaborately discussed in the contract, hence it is extremely important for the policy holder to thoroughly go through the document before zeroing in on a certain company. The market is full of different insurance companies offering competitive coverage and a wise investment is one that is made after a thorough comparative analysis of the various offerings by different agencies.
What are the different types of property insurances?
There are different types of property insurances, with the basic difference being what they have to offer. Depending on the typology of the building, the property insurance can also vary in what it has to offer. The basic type of insurance is the one taken by home owners that is taken for private residences and which ensures to back them up against a specific set of damages like fire, floods, earthquakes, theft etc. If you are a landlord, rental property insurance is what you’d opt for. It ensures to cover damages or losses that may arise due to negligence by the tenants. It helps in paying for the repair of damaged items like furniture, carpets and other parts or items in a home that may be damaged by the tenant.
The terms of the policy may vary depending on the type of structure and the needs of the policy holder. More and more money lenders have made it a prerequisite to have property insurance in order to get a mortgage on the same.
Whether you are a home owner or a landlord, it is extremely important to get your property insured for times unforeseen.
What are the types of insurances and benefits of getting your property insured?
Property insurance is like a safety net that one can fall back upon in times of damage that may occur to their property due to varied reasons. Insurance usually provides cover under two main categories- hazards and liability.
Hazard insurance provides a policyholder against damages that may occur due to fire, vandalism, theft and similar mishaps. It could provide a cash value of the damages or their replacement value. The replacement value provides enough payment to replace what is lost or damaged. The cash value pays the policyholder the worth of the property. It takes into account the actual value of the item and its depreciation till the time of damage and pays accordingly.
Liability insurance provides cover against the accidents that may happen on the property. Medical expenses that one might have to bear due to damage to life on the property; example, if someone falls or a similar mishap occurs, liability insurance will take care of it.
The two types of insurances above are what most companies offer, here are some advantages of insuring your property.
• At times of calamities, property insurance that extends coverage for the same comes as a blessing. The damage that may occur to a home can cause a huge dent to your pocket if not for a good insurance that would cover the expenses to make repairs for the same.
• If you have liability insurance, and some accident happens on your property- you will not have to shoulder the burden of the medical expenses for the same.
• If you are a homeowner who is renting out a property which is insured, the expenditure to repair damages made by the tenant or the residents will not have to be borne by you.
• Damage due to vandalism, theft etc that may occur to a home or a commercial property will be taken care of by the insurance company.
• Some policies also cover the contents of the home like art, jewellery, electronics etc. Any damage or theft of the same will be taken care of the said insurance policy.
Factors to keep in mind while choosing a property insurance policy.
There are many different companies offering many different options. It is imperative to study what they have to offer and decide accordingly. There are different factors that one will have to bear in mind, one being the amount of insurance coverage that you are getting from a certain policy on your property. The second factor is the amount of yearly premium that the insurance demands you to pay. The third factor that you have to understand is the time taken and the ease with which you can claim the homeowner insurance and settle the procedure. Lastly and most importantly, you have to go through the list of events that the insurance will cover. The different incidents, natural disasters etc that will be covered by the policy has to be in sync with what the topography of your site needs. Like some regions may be more prone to floods, some others to earthquakes- ensure that your insurance provides you a backup for the same. Pick a policy that ensures maximum coverage and insures against more mishaps and misadventures while the premium is also affordable for you.
Keeping in mind all these factors and understanding the importance of property insurance and how it benefits you will help you chose the right insurance for your property.