Property insurance is a broad term for a range of policies that provide property protection or property liability insurance. Property insurance provides financial reimbursement to the owner or lessee of a building and its contents in the event of damage or theft and a person other than the owner or lessee if that person is injured on the property.
Property insurance can include several policies such as homeowner insurance, renter insurance, flood insurance, and earthquake insurance. Personal property is usually governed by the policies of the homeowners or renters. The exception is private property, which is very expensive and very expensive – this is usually covered by the purchase of an add-on to the policy called a “rider”. In the event of a claim, the property insurance policy will reimburse the policyholder for the actual cost of damage or replacement costs to resolve the issue.
How Property Insurance Works
The perils covered by property insurance usually include some inclement weather, including damage caused by fire, smoke, wind, hail, snow and ice, lightning, etc. Property insurance also protects against vandalism and theft of the structure and its content. Property insurance also provides liability coverage if someone other than the owner or tenant is injured while the property and decides to sue.
Property insurance policies usually exclude damage caused by various events, including tsunamis, floods, drainage and sewer tanks, groundwater seepage, standing water, and several other sources of water. Usually, mold is not covered, as in an earthquake. Also, most of the policy does not cover emergencies such as nuclear events, hostilities or terrorism.
Factors Impacting Premium for Property Insurance
- If your property is located in a flood-prone area or an area where earthquakes are too frequent, your premium may be slightly higher.
- Age and structure of your building questions
- If your property is slightly old and has structural problems, your premium can be high.
- Home safety
- If your property has all the security systems, then the likelihood of theft is small; therefore, your premium may decrease in such a scenario.
- Amount of Belongings In contain
If you have some pretty valuable content on your property that you have chosen to insure, then your premium may depend on the value of the content you have selected to insure.
Sum Insured or Total Value of your Home
The total value of your property matters when deciding on a premium. If your property structure’s value is high, your premium is likely to increase, and vice versa. This can also be called the market value of your home because if the market value is high, then the sum insured will also increase.
Causes Of Loss That Aren’t Covered
Some events that can trigger a major BOP do not cover property damage. Some of these, such as employee misconduct or damage to the steam boiler, are excluded from the main BOP, but you can add coverage to it by paying an additional premium. Some events, such as wear and tear, are not covered by insurance because they do not meet the necessary insurance criteria to be accidental and unpredictable. (Regular maintenance of the property is your responsibility.) Insurance for other events, such as floods and earthquakes, is not required for all businesses. Separate policies are proposed. Nuclear reaction and war are considered uncertain because insurers cannot predict with any degree of accuracy the frequency of such events or the amount of damage that might occur.
Below are some other events that can cause damage that are usually excluded from the main BOP:
- Power failure (except when computers and electronic data are lost or damaged).
- Failure of computer hardware or software.
- Robbery and burglary.
- Most instances of pollution.
- Changes in humidity or temperature.
Lack of property insurance coverage is also excluded if there is no physical evidence of what happened to the property, for example, a shortage found after an inventory.
Make sure you understand the reasons for the loss and are not covered by your policy. Discuss with your agent the extent to which your business is at risk of losing one of these excluded events and whether you should purchase coverage for those specific risks, if available.