The importance of buying insurance for your properties — whether it’s a house, a commercial property, or a vehicle — cannot be underestimated.
Purchasing and maintaining such insurance policies is the best way to protect you, your family, and your property from unfortunate events and disasters.
In this article, we’ll talk about what property insurance exactly is. More importantly, we’ll dig into the most important types of property insurance you should get. Let’s start.
What is Property Insurance?
Property insurance is a broad term for policies that protect you and your property from liabilities and damages, which include:
- Theft and vandalism
- Weather-related disasters such as fire, smoke, snow, ice, lightning, etc.
- Liability coverage in case a person other than the owner or renter is injured
- Other disasters like tsunamis, drain and sewer backups, seeping groundwater, etc.
You can benefit from three types of coverage:
- Replacement costs – covers repair or replacement costs for the property
- Actual cash value – pays the owner or the renter the replacement cost minus the depreciation
- Extended replacement cost – pays more than the coverage limit if the construction costs have gone up, although this won’t usually exceed 25%.
If you want to compare different insurance plans, Quote Radar offers some useful quotations that might help you decide.
Now that you’re familiar with what property insurance is, let’s dig into the most common types you should know about.
Commercial Property Insurance
Consider buying commercial property insurance if you’re a business owner. This type of property insurance protects your business’ physical assets from fire, explosions, burst pipes, storms, theft, and vandalism.
Earthquakes and floors aren’t usually covered, but you can add them to the policy.
The total value of your business assets dictates how much you’ll pay. Other factors come into play as well, such as:
- Proximity to fire and police stations
Ultimately, the goal of commercial property insurance is to cover income loss or increased expenses that happen because of property damage.
As the name suggests, homeowner’s insurance is for when you want to protect your home from hazards like fire, lightning, wind, hail, liability, personal injury, etc. Other times, medical coverage is included in the policy.
You can certainly buy a home without a homeowner’s insurance. However, considering all the unfortunate things that can happen, investing in a homeowner’s insurance is a smart decision both for the short and long term.
If you rent out your property, a homeowner or commercial property insurance may not be suitable. Landlord insurance is a better option.
The coverage depends on individual policies. Generally, though, the insurance covers damage to the property you rent out but not the furniture and appliances, since they’re not part of your actual property.
Fleet insurance is like commercial property insurance, but it’s mainly for businesses with two or more vehicles. It covers different types of vehicles that your business owns and uses for commercial purposes.
It condenses all your vehicles into just one policy, instead of having separate policies for each.