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As a homeowner or renter, you likely take pride in your residence. Over time, you could accumulate many belongings that make your dwelling and lifestyle comfortable and meaningful. So what could happen if you experience a serious incident that jeopardizes your home or belongings?
A sudden burst pipe could flood your home, or a kitchen fire could break out and ruin a large portion of it. Someone could also break into your house while you're on vacation and steal your valuables.
No one expects these problems to happen, but without property insurance, they can create a serious financial burden when they do. Property insurance extends far beyond protecting the structure of your home or expensive valuables like artwork or jewelry like many believe.
Having sufficient property coverage is essential for safeguarding your home, belongings, and finances when disasters strike. Keep reading to learn how.
Property insurance is also called real property assurance and estate insurance. It's a way to become financially whole if you experience a property loss. Depending on your policy, property loss could include the contents of your home and the home itself.
Instead of paying for damages resulting from a covered incident, your insurance company will bear the brunt of the expenses. You can have different types of property coverage to create comprehensive protection for many items and situations.
For example, consider being a homeowner with a respectable amount in your savings account. You own your home free and clear and pay your property taxes on time. You would have a legal right to enjoy your property as you see fit, whether you prefer to fix it up and live in it or rent it out for extra income.
Let's say one of your neighbors has a fire that spreads to your property, destroying a portion of your yard and home with fire and smoke damage. In that case, you would have to spend most or all of your savings to repair your home and replace unsalvageable items.
With property insurance, you won't have to worry about spending all of your money or taking out loans to bounce back from a significant life event. Your policy will cover the expense in whole or in part.
With real property assurance, you'll pay a monthly premium as dictated by your insurer and policy type. Insurance companies also consider coverage limits, property size, property age, location, and deductibles when calculating premium amounts.
If you experience a loss that your policy covers, you can submit a claim to the insurance company. Once an insurance adjuster assesses and approves your claim, the insurance company will give you a settlement to cover the cost of repairs or to compensate you for lost or destroyed belongings. In many cases, the insurer will take out the deductible from the payout.
If you're a homeowner, your property insurance will likely cover four areas:
So what disasters will these policies cover? Most standard homeowners insurance policies cover explosions, fires, lightning strikes, wind or hail damage, theft, malicious mischief, and smoke damage. Some plumbing problems, like burst pipes, also have coverage.
The main thing to remember about property coverage is that insurers typically cover sudden incidents that are not the policyholder's fault. For instance, water damage from a burst pipe may have coverage, but a flood due to a lack of plumbing maintenance on your part won't.
Your plan could have open perils coverage or named perils coverage. The first option covers you for losses that the policy doesn't explicitly exclude, while the latter only covers events and situations named in the policy.
Unfortunately, property insurance won't cover everything. Still, many property owners are unsure about what their policies do and don't cover. For instance, about 40% of homeowners think their standard homeowners' insurance policy includes earthquake coverage, and over 35% believe their policies cover flood damage, according to Forbes.
The following situations usually won't have coverage with a typical property insurance policy:
You can supplement your primary policy with another plan to create comprehensive property protection. Flood and earthquake damage are two policies you can purchase separately from your main real estate insurance.
Homeowners' insurance is perhaps the most common type of property insurance. Unfortunately, only about 88% of people have coverage, according to Marketplace, which is a decline from the previous 95%.
Even if you don't own a home, you can benefit from one of many other property protection policies.
Condo insurance is HO-6 insurance or a type of homeowner protection. Standard policies have the same coverage as homeowners' insurance, except for dwelling or structure coverage. If the property is part of an HOA, the association's master insurance plan will cover repairs for exterior or shared space damage.
People often assume building insurance includes flood damage because flooding often happens in many places for several reasons. However, you'd need to buy separate flood insurance if you want coverage for your dwelling and personal items.
Though it likely won't cover loss of use for your home or additional living expenses for temporary housing, flood insurance is essential for covering extensive water damage.
Earthquake insurance might not be something everyone needs since the phenomenon doesn't happen everywhere. However, if your property is on or near a fault line in an area prone to earthquakes, you should consider buying a policy to cover your personal property, dwelling, and loss of use for your home.
If you rent out your house or own apartments, landlord insurance is a must to cover the dwelling and other structures. This insurance also covers items you own as a landlord and provides liability coverage. Your tenants' renters' insurance will cover their personal belongings.
As a renter, your HO-4 renter's insurance will protect you from financial loss, similar to homeowners' insurance. Coverage includes medical payments for guest injuries, personal property loss, liability, and loss of use. Since you don't own the home, dwelling insurance isn't part of the policy.
If you experience a loss that your property insurance covers, here's how you can file a claim for repairs or replacements:
You don't have to be a homeowner to protect yourself and your property from unexpected life situations and unfortunate perils. It doesn't matter if someone hurts themselves on your property in an accident or if a tree falls on your roof during a storm. Serious incidents can occur at any time, leaving you on the hook for substantial replacement or repair costs you might not afford.
With real estate insurance, you can safeguard your property against such situations. The insurer will shoulder most, if not all, of the costs associated with covered incidents. This level of financial protection is paramount for anyone with expensive assets like a vehicle, home, rental, furnishings, electronics, and so on.
Searching for the best insurance company for affordable property coverage can be difficult, considering the sheer number of agencies that offer some form of property insurance. Thankfully, Insurdinary simplifies the process, making it easier to get the comprehensive coverage you need without exceeding your budget. Through Insurdinary, you can compare free building insurance quotes from some of the top providers. Our knowledgeable representatives can help you find the best rates and apply for coverage. To begin your search for the best insurance products through Insurdinary, complete our online quote form today.