What is Property Insurance? These are the Types, Benefits & How to Choose

Property insurance is home protection from risks, here's the explanation.

Property insurance is home protection from risks, here’s the explanation.

What is property insurance? So, property insurance is protection for property or home if risks and undesirable things occur.

These risks include fire incidents, theft resulting in damage, and architect’s fees.

So, so that you can understand it clearly, let’s look carefully at the article below.

We will discuss in full the meaning of property insurance, its types, weaknesses and benefits.

Understanding Property Insurance

Property insurance is a form of protection for a house or property from various threatening risks.

Sometimes we leave the house for long periods of time, such as when we are on holiday or going home.

Well, the empty house certainly escapes your supervision as the owner.

Of course, this gives rise to several bad possibilities such as fire, flooding, and even crime.

Actually, there are general ways to prevent this bad possibility from happening to your home.

For example, installing CCTV, locking all doors and fences, and hiring security guards to guard the house.

However, this is not enough to prevent unexpected events.

If risks and disasters have occurred, then the methods above cannot restore the value of objects that have been damaged or lost.

Therefore, the role of property insurance is to protect the house from various risks and disasters.

The property insurance scheme is the same as other fields of insurance. The property insurance company will provide a written agreement with the customer.

Then, the customer pays periodic premium fees according to the agreement.

When a disaster occurs, the condition of the customer’s property will be surveyed by the insurance company to see the extent of the loss.

In addition, customers can document losses along with supporting evidence, such as purchase receipts for damaged property.

Furthermore, for claim payments we will take reference from this evidence.

The insurance provider will pay claims for property that has been damaged and is protected according to the agreement between the two parties (the agreement between the customer and the insurance company).

In essence, property insurance is a form of property protection from disaster through claim payments.

In property insurance, there is an all risk service. All risk services in property insurance include coverage in the event of a robbery, theft, fire, natural disaster, explosion or lightning strike in the house.

Types of Property Insurance

For those of you who want to use property insurance services, you must know the types.

Property insurance provides protection for residences and can also protect business property. There are two types of property insurance, namely:

1. Home Insurance

A house not only functions as a residence, but is also an investment asset that has value. Therefore, the house must be protected from all risks and disasters.

Well, property insurance is the answer to protect your home from bad things that might happen.

Home insurance means that losses and risks are transferred to the insurance service provider.

So, the one who bears all risks and compensates for losses is the insurance provider.

These losses include when a house experiences a fire or is affected by a natural disaster.

Now, home insurance not only provides physical protection for the house but also the risk when an accident occurs in it, such as protection for family members.

2. Business Insurance

From its definition, property insurance is a form of protection for an asset. So, in this insurance what is protected is business property.

Property insurance has the form of protection for businesses as well, namely protecting business activity property (business interruption).

This business insurance has benefits, such as when the property where your business is located experiences a fire, the insurance company will replace your business income temporarily.

Business actors can apply for business insurance for property when a risk or disaster occurs.

Before providing a price for business interruption coverage or business property loss, the insurance company considers aspects such as financial trends and the recovery period for the losses experienced.

Benefits of Property Insurance

There are several benefits of property insurance that you must know.

One of the benefits of property insurance is to protect and cover the costs of property losses if a disaster occurs.

Property insurance coverage includes protection from accidents, legal liability third parties, jewelry, household items, to buildings or property.

So, what are the other benefits? The benefits of property insurance are as follows:

1. As compensation if a fire occurs

In property insurance there is liability for property damage if a fire occurs.

In this case, the insurance company will provide compensation for losses according to the coverage amount.

2. Compensation if property or objects are lost

When you lose valuables, property insurance will provide compensation according to the value of the coverage.

Property insurance is an effort to reimburse property compensation costs according to a written agreement with the customer.

Before applying for reimbursement, make sure you have proof that the item is yours.

After that, you can make a report to the police and forward it to the insurance company.

3. Compensation due to Natural Disasters

Property insurance also provides you with reimbursement for property damaged by natural disasters, such as earthquakes, volcanic eruptions, fires, tornadoes and lightning strikes. However, this disaster must be natural, not the result of human actions.

Some property insurance companies not only provide reimbursement, but also provide temporary accommodation to protect customers when natural disasters occur.

Apart from that, accommodation costs from insurance will also be provided until your home is safe again.

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