Property insurance provides protection to the owner or tenant of property and its contents. Every person must have property insurance according to their specific requirement. Paying small and easy amount to the insurance company can guarantee you to bear your burden of financial loss in the future. It includes homeowners insurance, landlords insurance, condo insurance, renters insurance, earthquake insurance, and flood insurance.
Property insurance provides coverage against some perils such as theft, fire, smoke, hail, wind, lightning, the weight of ice and snow and more. Liability coverage is also provided by the property insurance in case if someone is injured on your property and decides to file a lawsuit against you. A property insurance policy can either compensate you for the actual value of your loss or the cost of its replacement.
Types of coverage in property insurance
There are three main types of property insurance coverage available for the property owners or renters of any property:
Replacement Cost Value coverage:
Replacement cost coverage or “RCV” will provide the full replacement cost if your property or possession is damaged due to covered perils. If you have replacement cost value then the insurance company will bear the expenses to replace or repair your property and belonging to make it as it was before the damage. Generally, insurance companies guarantee full replacement cost, they don’t pay the current market price for your damaged property.
Benefits of Replacement Cost Value Coverage
Very fruitful for all homeowners and renters property.
Protects you in unfavorable situations by paying full replacement of your loss.
Actual Cash value coverage:
Actual cash value (ACV) is a strategy to value the insured property to pay the claim after damage or loss. It is not like replacement cash value (RCV), it covers the replacement price after deducting the depreciation. An insurance company will pay the amount according to the condition of the property and its remaining life. You will not get the amount you have paid for purchasing the property because some amount as depreciation is also calculated (The value of the property minus depreciation equal to Actual value).
Benefits of Actual Cash Value Coverage
Protects you from paying expenses of damage to your property.
You are liable to pay a small amount while the rest will be paid by the insurance company.
Extended Replacement Cost Coverage:
This type of coverage can pay a certain amount for the damage or loss over the limit of your policy. Extended replacement cost is very comprehensive and guarantees to return the property in the original condition as it was prior to an accident even if the construction price is increased. It can pay 120 to 125 percent of the coverage limit to completely replace the damage to your property by covered perils.
Benefits of Extended Replacement Cost Coverage
Provide coverage over the limits in your policy.
Protects you from paying for replacement even if the price increases.
Types of property insurance
It’s very important to protect your property by purchasing property insurance that meets your special needs. Different properties require different insurance policies which are specially designed for that specific purpose. Following are the four basic types of property insurance policies:
All the homeowners must have homeowners insurance policy HOI to protect their home’s structure and belongings from a destructive event, such as fire, theft, vandalism and other covered perils. Even if your house is in a safe area it is very essential for you to purchase a homeowners insurance policy for the security of your loved ones from unfortunate things. Homeowners insurance provides coverage to you, your home, belongings and family members. It includes damage or loss to your property, your liability and legal defense fees. It is a policy that provides a complete sense of security to the policyholder by covering the whole family and all the expensive and personal items in the house. Looking for more details on homeowners insurance? Read more…
HO4 or renters insurance policy is designed to protect the tenant’s personal possessions and belongings such as furniture, electronics, and other expensive items. Those who rent a home or apartment must cover themselves against loss or damages caused by theft, vandalism, fire and other unfortunate events. A renters insurance policy is financial protection which can cover your personal property as well as damage to others property because of you. It provides many types of coverage and some optional coverage to ensure complete safety and mental peace to the renters. It provides liability protection, legal defense, and additional living expenses if you need to stay away from home because of an insured disaster. Check out for more information on renters insurance policy…
People who are renting out their property, need specialist insurance policies designed for the protection of their rental property against some covered perils like lightning, fire, theft and other unknown disasters. The landlord insurance policy covers the buildings and contents belong to the landlord and being used by the renters, it does not cover renters personal property. A standard landlord insurance policy protects the property owners by providing financial support in some unfavorable conditions by providing certain coverage such as building coverage, content insurance, landlord’s liabilities, malicious damage, rent guarantee, loss of rent and so on. For more information on landlord insurance policy check the source specially created for you…
Condo insurance (HO6) is very much like homeowners insurance but mend for the owners of a condominium. Condo association or HOA provides protection to the exterior of the condo by providing some coverage like bare wall coverage, all-inclusive coverage, single entity coverage, and some other optional coverage. However, condo insurance protects the interior of the condominium unit and the personal property of the condo owner. It provides some very important coverage like condo building property coverage, condo liability coverage, personal property coverage, loss of use coverage and so on. Both insurance policies HO6 and HOA are designed for the protection of condo association and condo unit from the damages caused by some covered perils. You can also choose any optional coverage according to the specific requirement of your location. Some optional coverage like an earthquake will be fruitful only if the condo association and condo unit owner both are having. To know more about condo insurance policy check the details here.