What is the definition of property insurance?

Each year, Americans suffer approximately $13.6 billion of property damage due to fire, according to the National Fire Protection Association. Property insurance helps protect you from loss due to fire as well as from other causes.

Function

Property insurance is a type of agreement in which an insurance company provides payment for you to repair or replace things you own when a covered loss occurs. You purchase insurance for a particular amount or face value, which is the maximum amount the company will pay if you suffer a loss.

Types

Homeowners insurance covers the contents and structure of a single-family residence, while condominium insurance covers the particular unit that you own as well as the personal property inside. Renter's insurance protects you against losses to your personal property while you live in home or apartment you are renting.

Losses

Property insurance covers fires, lightning, hailstorms, wind, the weight of ice or snow, damage due to freezing or smoke, falling objects, theft, vandalism, accidents that involve damage to your plumbing or electrical appliances and damage by vehicles accidentally colliding with the place you live.

Cost

In exchange for the coverage provided by property insurance, you pay a fee known as a premium on a monthly, annual or other regular basis like every three or four months. The amount of this premium varies based upon the type of insurance and its face amount.

Considerations

Standard property insurance does not typically cover damage due to floods and earthquakes, but there are separate insurance policies available to cover you against these types of losses if you live in a high-risk area, reports the Insurance Information Institute. Most property insurance policies also do not cover acts of war or terrorism, and as of December 2009, there was no supplemental policy available to individuals for protecting their property from these threats.

Source:

Insurance Information Institute: Are there any diasters my property insurance won't cover?

Nationwide: Property Insurance

National Fire Protection Association: THE TOTAL COST OF FIRE IN THE UNITED STATES