About Property Insurance

Property designates those real or intellectual goods that are commonly recognized as being the rightful possessions of a person or group. A right of ownership is associated with property that establishes the good as being "one's own thing" in relation to other individuals or groups, assuring the owner the right to dispense with the property in a manner he or she sees fit. Moreover, these days, the term property is something, which initiates family dispute, quarrels and relation break-ups. But again, under the laws of some land, property insurance has become very common as well as mandatory these days.

The protection against most risks to property, such as fire, theft and some weather damage is what is known as property insurance. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance.

There are two main ways of property insurance - open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage causing events as fire, lightning, explosion and theft and also in the case of catastrophes like fire, explosion, theft, or vandalism, property insurance helps cover an individuals costs - whether it's to repair damaged property or replace what he or she have lost.

Now, when we are discussing about property insurance, it is very obvious for a person to ask, what all are covered under this type of insurance. Now, the way an individual is covered for property insurance varies from policy to policy in two main ways:

• The property that is actually insured.

• The type of events that lead to the loss.

In terms of property, some policies cover basic equipment (building structure, furniture, inventory, equipment, and supplies); others insure money and securities, such as lost revenue or cash on the premises, and hard-to-replace records, such as accounts receivable, from damage or loss.

Events that do damage are known as perils or causes of loss, and include weather-related events such as lightning strikes or hail, or human causes such as robbery or vehicular accidents.

Again, there are two types of policies available to cover perils: a named-perils policy, which covers losses resulting from only those perils the policy names, and an all-risk policy (a.k.a. special form coverage), which offers coverage for all perils except those specifically named. These days, a large number of companies are providing the service of property insurance to their customers. The missions of these companies are:

a. Assure stability in the property insurance market

b. Make sure basic property insurance is available for all qualified properties

c. Encourage the maximum use of licensed insurers

d. Provide for the equitable distribution of risk to all licensed insurers

With the aim of fulfilling their missions and to attain their objectives, premium payments in the form of credit cards are also being accepted by these financial institutions. The Insurance Services Office provides insurers with basic premiums incorporating a number of factors to determine the basic risk of your property. The primary factors in setting property insurance premiums include the type of building structure, the presence or absence of protective safety measures, and the proximity of your property to other high-risk areas.

This basic rate is then further adjusted at the discretion of the insurer, who credits or debits based on claims history or specific loss-control measures. In states where rates cannot be adjusted, dividends are commonly used as a way to reduce premiums.

But certain things which must be kept in mind before going out blindly after the schemes offered by the companies. Those check points are:

1. Keep a close eye on renewals

An individual must not get stuck in a pattern of renewing whatever coverage he or she may have had the year before. Your needs may have changed, and you could end up renewing coverage for something you no longer use, lease, or own.

2. Review any exclusions

Carefully read over the policy and make a special note of any exclusions, such as flood damage for example. Depending on your individual business and its location, you might want to purchase coverage for these exclusions.

3. Consider construction

For new construction, it can be a worthwhile investment to consider concrete, brick, or steel for building materials since these are less inclined than a structure made of wood to suffer total destruction in a fire.

Last but not the least, always make sure that the bases are covered by the policy. The following are the general guideline when thinking about what type of property to insure.

1. Buildings and other structures

2. Any outdoor property such as signs or fences

3. Mobile property such as construction equipment or automobiles

4. Machinery

5. Furniture, equipment, and supplies

6. Inventory

7. Leased equipment

8. Computers and other data processing equipment

9. Records, valuable papers, books, and documents

10. Money and securities

11. Intangible property such as trademarks and logos

Thanks.