Is Property Insurance the Same as Homeowners Insurance?

Is Property Insurance the Same as Homeowners Insurance?

Property insurance is a general term that refers to a group of policies that serve the purpose of protecting real estate property and its contents or providing liability coverage for the property owners; homeowners insurance is a type of property insurance that protects homeowners by insuring against damages and losses to the home and its contents, and providing liability coverage in case of injuries sustained in the home.

Property Insurance

A property insurance coverage typically covers the physical structure and its contents in case of damage or theft due to burglary, fires or natural disasters. In case a claim is made to the insurer for damage or losses to the home or its contents, the property owner(s) will be reimbursed the actual value of the damaged or stolen item or the replacement cost required for repairs or replacement up to a certain limit.

Property Insurance may also provide liability coverage for homeowners in the event a person other than the homeowner sustains an injury within the insured premises.

Types of Property Insurance include:

• Homeowners Insurance
• Condo Insurance
• Tenant Insurance
• Commercial Property Insurance
• Rental Insurance

Homeowners Insurance

Homeowners insurance coverage typically insures against damage or losses to a home and its contents. Also provided is liability coverage in case the homeowner is found liable for an injury or death to a person other than the homeowner or member of the household, that occurs in the home.

In addition, homeowners insurance is usually required by mortgage lenders before approving a mortgage application.

Events covered by a homeowners insurance include:

• Damage to the interior of a home.
• Damage to the exterior of a home.
• Theft or loss of house fixtures and appliances.
• Loss of personal belongings due to theft, fire or any other covered instance.
• Liability in case someone sustains an injury in the home.

Insurers typically include a limit they will be liable for in the event a claim is made. The standard limit is usually $100,000, but homeowners can opt for higher limits in exchange for higher monthly or annual premiums.

Another factor to consider in home insurance is the amount of deductible you are liable for in case of a claim. For example, if your house sustains damage due to a fire and you make a claim with your insurer, a claims adjuster will be sent to evaluate the damage and create an estimate for the repairs. If the adjuster arrives at $15,000 as the amount needed for repairs, your insurer will inform you of your deductible, the amount you'll have to pay out of pocket for the repairs.

If you had entered into a policy agreement for a deductible of $5000, the insurer will cover the remaining $10,000. Deductibles are usually agreed on early on when signing the policy agreement with your insurer. Higher deductibles mean lower monthly or annual premiums.