Property insurance is a form of cost covering provided to home owners by various organizations like insurance agencies and banks to replace the loss during disasters.
Property insurance is comparatively a new concept in the real estate market. Owing to this lack of knowledge, there are dozens of instances where property owners end up losing pretty much everything in an unforeseen circumstance. This make us realize that property insurance is mandatory considering the times we are living in.
Who needs Insurance?
Anybody and everybody who owns a house needs to have property insurance done. However, the processes of getting one are different depending on the sort of property we are talking about. (We will discuss about this later in this article.)
The scanty inclination of home buyers towards property insurance might be primarily because of the fact that most home owners have a distorted notion about the coverage provided by property insurance. Many property owners have vastly misguided views on what the insurance actually covers. While some believe that flood damages will be covered, some other have the notion that no damage done by any sort of natural disaster can be reclaimed under property insurance.
This brings to the question, what is the actual coverage policy of a property insurance?
To which, the answer is that the clauses different for every company and every country. Also, the price of the insurance also is a major contributor in the differences in the property insurance clauses. However, whatever may the situation be, there is a consensus that natural disasters recognized as rampant by the government of that area wouldn’t be covered under the property insurance clone. That is, a house in a flood prone area will not get the coverage for the damage caused by flood. Also, damages done by war is also not covered by most property insurance agencies.
Thus, it can be broadly concluded that property insurance covers damages done by thefts, and certain other natural disasters that are actually unforeseen in a particular geographical location.
If you have valuables in your house like art, jewelry or antique pieces, they will be covered under property insurance schemes only if you have proof with you that you owned the certain item. However, the theft of cash is not covered by most property insurance companies, although the rules vary across the world.
Property insurance is mandatory, but it is advisable for a homeowner to invest in one which doesn’t make false claims and provides a decent coverage for you house. beware of the companies which claim unbelievable rates for your property. If the company is unknown and its rates are exceptionally good, this should be a red flag for you. Research the company’s reputation, and don’t just take the salesman’s word for it.