Life is indeed unpredictable. People tend to get engaged in long-term planning, planning their life, goals, and objectives, and thus utilizing their resources accordingly. However, it should also be considered, that every moment in life is crucial, and a single incident can change one’s life entirely. Such incidents may affect the individuals personally, and even the assets that they own.
The concept of property insurance dates back to 1666, especially to the event of Great Fire of London, which burned down more than 13,000 houses to the ground. This concept led to the formation of first property insurance company in 1710. Currently, property insurance is something that everyone is quite aware of
The main objective of property insurance is to ensure that an individual or a business is able to recover following a loss. The policy requires the individual or business to pay a premium to the insurance company. This payment can be considered as an initial investment, in return of which, the insurance company guarantees to reimburse any loss that the individual or the business suffers. The burden that is borne by the insurance is large, depending on the terms and conditions of the policy.
Property insurance is a policy specially designed to protect the belongings of both individuals, as well as businesses against the risk of natural disasters such as earthquakes, typhoons, and cyclones. It also provides protection against the risk of theft, obsolesces of asset and safeguards from claims brought by the third party.
Many people do not realize the fact or are aware of the importance of property insurance. Thanks to the laws of some countries, or conditions of some contract, it is essential to get the property insured. There also some situations where property insurance can be obtained, along with any other form of insurance.
It is indeed a major issue for both individuals and business to protect their property against the risks, both natural and risks arising from human activities. These policies comprise of either a “named perils’’ cause, which requires the inclusion of actual cause of the loss, such as theft or fire. On the other hand, “open perils” are property insurance contracts, covering all risks except for few exceptions, such as earthquakes or terrorism acts.
The market for property insurance is vast, providing coverage, such as home insurance, a block of flats insurance, buildings and content insurance, building only insurance, contents only insurance, flood insurance, and flood risk insurance. It also includes tenants insurance, renovation insurance, let insurance and much more.
What is a matter of question is to consider whether the repairs are covered at actual cash value or replacement cost under the policy? It is usually advisable to go for the replacement cost under the policy. This is due to the fact, that under actual cash value clause, a damage is shall be calculated based on the market value of what is being damaged. Alternatively, replacement cost clause provides reimbursement for full repair cost.
It is essential for both individuals and business to evaluate various options available, before selecting an appropriate property insurance policy.