Property Insurance: Coverage and benefits

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If you want to save yourself from financially breaking down from a disaster that would destroy your business or personal property, then get a property insurance. Your favorite very expensive painting may be destroyed in a fire breakout, but you may get it replaced for its total value and get the same painting if you have property insurance and also not worry about the money.

What is property insurance?

Property insurance means protection for your business against any physical damage or loss of your assets. Assets here mean the property involved in your business or even your personal property. When you got home owners insurance you may have thought that it will cover all. But you may be surprised to see the response you get from the insurance company when you file for a claim for a damage caused to your personal property.

Most of the homeowners policy covers personal property. Usually property insurance accounts for 40% of the total amount of insurance on the entire home.

What does property insurance cover?

Some policies offer property insurance coverage for basic equipment like the building structure, furniture, inventory, equipment and supplies. There are also policies that insure money, securities like lost revenue or cash on the premises and hard to replace records.

The perils that property insurance covers are:
  • Known perils
  • Multiple perils
Known or named perils are fire and theft. Most of the insurance companies offering multiple peril coverage include theft as well as fire. The named peril policy will cover losses caused by the dangers mentioned in the policy where as the multiple policy covers all perils except those that are mentioned as excluded in the policy.

Usually most businesses get multiple risk insurance that compensates for a Business Owner's Policy. Sometimes business insurance also includes two types of additional (optional) coverage to provide insurance coverage for property - Business interruption insurance and extra-expense insurance.

The business interruption insurance provides protection for lost salaries, debts, taxes and for any loss of profit for any damage to the business. On the other hand, extra-expense insurance covers the cost of relocating your business as a temporary arrangement as a result of a covered peril.

What are the property insurance benefits?

Property insurance benefits are received as coverage for any kind of damage that occurs to your property. The process of reimbursement follows a certain procedure. The property that you have insured is valued in to ways
  • If coverage is for the actual cost of replacing your property then it is known as Replacement-Cost Basis.
  • If the coverage is for the replacement cost minus the cost of physical depreciation of the property that is lost or damaged, then it is known as Actual Cash Value (ACV).
ACV charges a lower premium but then the reimbursement could be inadequate when you have to get replacement or your items.

You may purchase insurance to cover property either through home owners insurance or as a separate policy. The choice is finally yours. If you want that your property should be covered for its total value then purchasing a separate policy would be a good idea. Safeguard your self from any big loss that might occur and keep your property covered.

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PostPosted: Thu Aug 16, 2007 7:57 am   Post subject: Property Insurance- coverage explained!  

Hi guys!

I think its been quite sometime that Nur had inquired about Property Insurance (over here & none of us came up with real good replies!

Looking forward to more credible info,



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Last edited by lakemen on Wed Jan 20, 2010 1:17 pm
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PostPosted: Thu Aug 16, 2007 8:03 am   Post subject: All I may say..  

Hi Lakemen!

All that I may speak of Property Insurance is about covering one's properties from fire, thieves and natural damage. So, you may easily understand that property insurance is all about combining all those major branches of insurance that may come in the form of fire insurance, flood insurance, earthquake coverage, homeowner's policy & boiler's coverage. Hope this piece comes to Nur's benefit!

Regards, Fatman

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PostPosted: Thu Aug 16, 2007 10:23 am   Post subject: talking abt perils!  


Just as lakemen had mentioned in his earlier post about the two types of perils, I'd like to mention that these perils are damages done by way of natural events.

Yes by way of the ‘named perils' we get coverage for those losses which are already enlisted within our policy but the open perils are in reality all-risk policies that covers for those losses which are already not covered. These all-risk policies are best for the business houses.


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PostPosted: Thu Aug 16, 2007 10:27 am   Post subject:   

Hi All!

Thanks Fatman!

Crossbreed007 also has something useful for the business houses!

Yeah what I last said was -

This insurance provides the financial protection against the loss of or damage to the personal property due to theft, fire, weather damage or other perils. The other special forms of property insurance are fire insurance, flood insurance, home insurance, earthquake insurance, boiler insurance.

There are two ways to insure the property: open perils, and named perils.

For the open perils cover all the causes of loss not specifically excluded in the policy.

Thanks again everyone, Lakemen


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PostPosted: Thu Aug 16, 2007 11:19 am   Post subject: My way of describing it!  

Hey guys…I would just like to stick to my idea that the coverage offered tbrough Property Insurance may differ from insurer to another.

Generally speaking, there are two ways we may think of its effects – (i) Covering any property that's already insured & (ii) Covering any property that's uninsured.

My idea of describing it is somewhat different since I'm talking about some policies that cover only fundamental equipments eg. house structures, inventory, furnitures etc.

Other policies would cover securities or say money-value in the form of bad debts on premises, sensitive accounts information etc. Stuart McCormick

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PostPosted: Thu Aug 16, 2007 11:36 am   Post subject: better than the Bu. Owners  

Yeah guys that's quite alright…but at the same time I feel that these all-risk policies are worthy of companies because of their choice of losses to be reimbursed even though they would end up paying much higher premiums.

Theres a policy called the Bu. Owner's policy which usually combines property insurance & liability insurance which safeguards companies from such odds but on occasions where these companies don't qualify for this policy, over there the property insurance comes to real help! It really takes good care of your business.

Thanks to all, Juanita

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PostPosted: Mon Aug 20, 2007 11:12 am   Post subject:   

I may give a different perspective, which classifies property insurance by the types of losses.

1. Property damage cover: Direct damage or loss to real or personal properties

2. Business interruption cover: Loss of profit following the property damage

3. Extra charge cover: Costs or expenses for temporary operation of business until the damaged properties have been recovered.

4. Third party bodily injury liability cover: Bodily injury to third party caused by the named perils covered under PD. It does not cover general liabilities. This is not of nature of property damage, but is mandatory in certain countries, which can be attached to the PD policy there.


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PostPosted: Fri Jan 23, 2009 12:12 pm   Post subject:   

The following types of property insurance are available in the market,

  • Commercial/business property insurance

  • investment property insurance

  • casualty insurance

  • personal property insurance

Hope this helps.
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