What Is Property Insurance and How Does It Work?

The term “property insurance” is used in a broad manner to describe a series of various policies that provide a property owner protection coverage for their property or liability coverage.

It is designed to reimburse a property owner or a renter of a specific type of structure financial-based reimbursement for the actual structure and the contents contained within the structure if there is any type of theft and damage.

It also provides coverage to an individual or individuals that become injured on the covered property if they are not the owner or are not the renter of the covered property. 

Various Policies 

Property insurance has the ability to include various policies. These may include homeowner’s insurance, flood insurance, renters’ insurance, earthquake insurance, and policies that are similar in nature.

In most instances, high-value personal property coverage is not included. For items that fall under this category 0 such as jewelry or collectible art pieces – an addition must be added to the policy. This addition is referred to as a “rider”. 

What Coverages Are Available in Property Insurance? 

There are three types of coverages associated with property insurance. These are as follows:

  1. Actual Cash Value – This is the amount paid that covers the replacement cost, minus the depreciation associated with the item. 
  2. Replacement Cost – This is the cost of repair or complete replacement of an item. It is usually the same or equal value. 
  3. Extended Replacement Costs – This covers those situations where more is paid than the outlined coverage limit because of increase in price. This amount usually does not extend past the 25% limit amount. 

How Does Property Insurance Work? 

Property insurance covers a wide array of perils. These may include smoke, fire, impacts from snow and ice, hail, wind, lightning, vandalism, theft, and more. Property insurance will cover the structure and the contents of the impacted structure.

Additionally, if someone is injured on the property, coverage is provided. That person does not have to be the owner or the renter. This type of coverage is referred to as “liability coverage”. 

There are other events and situations that are not covered by property insurance. Examples include backups from sewers, floods, standing water, mold, tsunamis, seeping groundwater, and similar situations.

Extreme types of circumstances are typically not included, either. These include acts of terrorism, situations extending as a result of war, and nuclear events. You simply file a claim. The insurance company starts processing the claim and will inform of what events will or will not transpire during that process. 

Contact Us 

If you are interested in obtaining property insurance, we here at Modica Associates can assist you. We can help find the best policy for your needs at the most competitive of prices. We also assist with numerous other types of insurance, including vehicle insurance, brownstone insurance, and more!

All it takes is a quick phone call, a few questions, and you will be on your way to the policy that is best suited for you and your life. Contact us now by calling: 718-855-1836

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