What is property insurance?

Property insurance is a term that covers a range of insurance policies that protect policyholders from damage, destruction, loss, or theft of physical property or from liability that arises out of the use of the insured property. Property insurance reimburses property owners for financial losses that result from a covered cause of loss listed on the insurance policy. Examples of property insurance include commercial property insurance, homeowners insurance, flood insurance, earthquake insurance, and renters insurance. Damage to covered property is reimbursed either at replacement cost or actual cash value, depending on the terms of the policy.

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When do I need to be aware of property insurance?

You need to be aware of property insurance whenever you are seeking to protect valuable property that you or your business own from financial loss. For example, to protect your business property or your home and its contents from loss due to fire, storm, lightning, explosion, and other types of damage, you would purchase a property insurance policy, such as a commercial property insurance or homeowners or dwelling insurance.

What is important to know about property insurance?

Property insurance is a broad term that covers many different types of insurance policies. You may need multiple different insurance policies to fully cover the same property. There are some other important items you should know about property insurance:

Commercial property insurance is generally bundled together with other forms of insurance for businesses, such as commercial general liability insurance.
Commercial property insurance rates are calculated by determining the value of the property and its contents and multiplying that value by its risk factors.
Many commercial property and homeowners policies specifically exclude causes of loss such as flood and earthquake damage. If you need coverage for these causes of loss, you may need to add them to your policy or purchase a separate policy.
Some types of extremely valuable or specialty contents items are not covered by standard homeowners insurance or may have a specific limit that does not cover the full value of those items. Examples may include guns, jewelry, and musical instruments. You may be able to purchase a rider to your policy to cover these items.
Many homeowners policies provide coverage for liability for accidents that occur on your property. However, you may need a general liability policy to provide additional coverage.