For many, a home might be the costliest and most significant investment made in their lifetime. While you invest in something, by default, we try to secure it. We do insure many things all through our life, forgetting to guarantee the most prominent investment, property. It is imperative to protect your investment through – property insurance to secure your asset from any peril.
Not many know the benefits of property insurance and its importance. There is also very less understanding of the different types of insurance available in the market, making one confused about which to pick. This blog talks about the types of coverage and their features.
What are the types of property insurance?
While one cannot stop to reiterate the importance of property insurance and the safety net it provides for the owner, here are the two most common types of property insurances offered by any insurance company.
Hazard Insurance: This Insurance covers any perils that occurred because of fire, vandalism, theft, and similar incidents. Hazard insurance provides cash value or gives a replacement value for the damages that occurred. Enough amount or replacement value is given to the individual for the damage or loss of property. The policyholder of insurance is paid based on the actual cost of the item and its depreciation value until the damage time.
Liability Insurance: This is one of the types of property insurance providing the policyholder a backup or coverage for the accidents that may happen on the property. For instance, liability insurance gives coverage for the medical expense that the holder might have to bear for any incident/accident caused to an individual while in the property.
Under the umbrella of Hazard and Liability insurance – there are multiple types of property insurance concerning both residential and commercial, saving your assets from any foreseen incident. Here is a list of the kinds of property insurance that might fall under the Hazard or Liability insurance type.
Protection against property damage: Irrespective of how healthy a structure is, it is vulnerable to any natural disaster. The very reason a property or a structure should be insured is to get coverage against natural calamities like monsoon and floods, fires, earthquakes, and any other damage related to the weather. The size of the structure, location, and other security features are included for the house or commercial property, and one cannot protect it from flood, burglaries, or floods – making it a must to insure the property.
Protection against liability: One prime benefit of property insurance is the liability coverage it offers. You might be one of the vigilant homeowners and can prevent many accidents or injuries at your place. But you can't predict or safeguard the incidents happening in your neighbor's property. Protection against liability property insurance gives you that leverage of providing coverage from any such potential events.
Protection for commercial ventures: When you rent your property, there are many responsibilities included, such as you would be held answerable for any damage to the structure, injuries caused because of the structure, and so on. To ensure that you are covered in such situations and also can help the tenant through the challenge, having protection for commercial ventures is advised.
In the end, after reading the types of property insurance and property insurance facts, we can summarize that property insurance helps the policyholder from having any financial loss or asset loss because of the unforeseen disasters.