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What Are the Main Types of Property Insurance?

What Are the Main Types of Property Insurance?According to the United States Census Bureau, the national rate of home ownership was 64.1% in 2019. Just like with any possession, a home needs to be protected from potential damages and losses. This is where property insurance comes into place. Because a home is one the largest investments that a person has, it is necessary to provide the right type of coverage for damages that are caused by all types of risks.

The purpose of property insurance is to financially reimburse property owners and renters in the event of a loss from a storm, natural disaster, or theft. Under property insurance, there are a number of policies that can offer owners and renters either property protection coverage or liability coverage.

Through property protection coverage, an owner or renter who files a claim should be financially reimbursed for either the actual value of the damage, or the replacement cost to fix the issue. Through liability coverage, property owners and renters can be covered if someone is injured while on their property and decides to take legal action.

What are the main types of property insurance?

The main types of property insurance are:

  • Homeowners’ insurance
  • Renters’ insurance
  • Automobile insurance
  • Commercial property insurance

Each type of insurance protects different types of properties from certain perils.

For example, homeowners’ and renters’ insurance protects the personal properties of owners and renters from disasters such as theft, fire, smoke, wind, and lightning. Automobile insurance helps provide coverage for a driver’s automobile in case the driver is at fault or has been involved in a car accident. For business owners, commercial property insurance is used to protect the company’s physical assets from natural disasters like fire, burst pipes, storms, and explosions. If you operate your business from your home, you may need a commercial policy as well as residential policy.

How does homeowners’ insurance protect the assets of the owner?

A homeowners’ insurance policy provides personal property protection coverage and liability coverage to homeowners. There are four kinds of incidents that are typically covered through a homeowners insurance policy: interior damage, exterior damage, damage of personal assets or belongings, and injury that happens on the property.

The policy covers the damages to a person’s house and assets, and helps cover the homeowner against accidents in the home or on the property. What makes homeowners insurance policies unique is that damage from certain natural disasters such as floods and earthquakes are excluded from the policies. This means that homeowners will need to get additional riders or coverages added to the policy to insure their property from floods and earthquakes.

How does renters’ insurance help protect the renter?

Unlike homeowners, who are required by most mortgage companies to buy homeowners’ insurance, there is no requirement to purchase renters’ insurance. However, renters’ insurance protects renters from being held liable for any damages that may be caused to their apartments, as well as another person’s injuries should they have an accident in your home. Note that renters’ insurance probably won’t fix structural damage; the landlord’s policy should cover that.

Renters’ insurance is especially beneficial to people renting an apartment or condo, homeowners who are downsizing to an apartment, and college students who are not covered on their parents’ homeowners’ insurance policy. Renters’ insurance does not provide coverage for natural disasters such as floods or earthquakes, so you may have to purchase additional coverage for damages caused by those types of disasters.

How does automobile insurance protect a driver?

An automobile is a type of investment that needs to be protected. Drivers who have auto insurance have reassurance that they will be financially reimbursed in case they are involved in a car accident or if their vehicle is stolen. Drivers can also be financially reimbursed if their car is damaged through a natural disaster.

With auto insurance, drivers agree to pay premiums on either a monthly, biannually, or yearly basis to maintain protection against financial losses caused by car accidents or other damages. In exchange for paying a premium, the insurance company agrees to pay the losses that are outlined in the driver’s policy. Some of the losses include bodily injury liability, property damage liability, and uninsured motorist coverage. Bodily injury liability covers the costs of the injuries that either the driver or another driver caused while operating the vehicle.

Property damage liability reimburses others for damage that the driver or another driver operating the vehicle caused to another vehicle or property. Uninsured motorist coverage reimburses a driver when an accident is caused by another driver who does not have automobile insurance.

What are some of the benefits of commercial property insurance?

Commercial property insurance helps protect a business against disasters such as fires, lightning, wind, hail, or vandalism. Under this type of policy, the business owner’s physical assets are protected. Some of the general items that are insured under a commercial property insurance policy include a building, inventory, important documents, office equipment, and outdoor items such as signs, fencing, and storage sheds.

Similar to homeowners’ and renters’ insurance policies, damages caused by floods and earthquakes are not covered under this policy. Business owners will have to add those additional coverages to the policy to cover potential damages from those natural disasters. The premium that a business owner is responsible for paying is dependent upon the value of all of the business owner’s assets, including the building.

Working with the insurance dispute attorneys at Warhurst Law can make the difference between a denied claim and the maximum compensation for your losses and damages. When your insurance company denies a property insurance claim, you need help and you need action. At Warhurst Law, we provide both. We know you need help now and we’re ready to start advocating for you. Call 251-207-1296 or complete the contact form to make an appointment with a Warhurst Warrior today. We represent clients in Alabama, Louisiana, and Florida, and throughout the Panhandle and the Gulf Coast.