Property Insurance

1
Property Insurance

• Chapter 39

2
Home and Property Insurance

• Home and Property Insurance protects you from
  three types of economic loss
• Damage to your home or property.
• Additional expenses you must pay to live
  someplace else if your home is badly damaged.
• Liability losses related to your property.

3
Damage to Home or Property

• Homes and other expensive property should be
  insured for fire damage, vandalism, unavoidable
  accidents, and natural disasters.
• Fires cause over 12 Billion in damage every
  year.
• Natural Disasters include lighting, earthquake,
  tornado, wind, and flood.

4
Additional Living Expenses

• If your home were not livable while repairs were
  taking place, and your policy covers Additional
  Living Expenses than this will help with most of
  the cost to live in a motel, hotel or furnished
  apartment.

5
Liability Protection

• This is covered under the Personal Liability
  Coverage
• Personal Liability Coverage - protects you from
  claims arising from injuries to other people or
  damage to other peoples property caused by you,
  your family, or even your pets.

6
Property Insurance Policies

• When considering the purchase of property
  insurance, you need to decide what should be
  insured as well as against what perils it should
  be insured.
• Perils - are the caused of loss, such as fire,
  wind, or theft.
• Real Property - property permanently attached to
  land, such as a house or garage.
• Personal Property - property not attached to
  land, such as furniture or clothing.

7
Individual Policies

• Policies to cover against specific perils
• Standard Fire Policy - insures against losses
  caused by fire or lightning.
• Extended Coverage - broadens the coverage to
  include damage caused by perils such as wind,
  hail, smoke, and falling aircraft.
• Additional coverage can be purchased to cover
  other perils as well
• To protect against floods in a flood-prone area,
  or
• To protect against financial loss caused by an
  earthquake

8
Homeowners Policies

• Homeowner Policy - this is a very convenient
  package-type insurance policy designed to fit the
  needs of most homeowners wishing to insure their
  homes and property.
• There are normally three forms of homeowners
  insurance
• Basic Form
• Broad Form
• Special Form

9
Homeowners Insurance
10
Renters Policies

• This is a policy created for the renters of
  apartments, condominiums, and or rented homes.
• This policy covers household goods and personal
  belongings and provides protection against the
  same kinds of perils covered by homeowners
  policies.
• This policy might include personal liability
  coverage.
• However, this does not actually protect the
  dwelling itself.

11
Buying Property Insurance

• Getting the Correct Coverage
• Planning for the increase of property value.
• A 90,000 house, when built, might cost 125,000
  to replace it with the increase in property
  value.
• Some policies will cover this increase, as long
  as the insured value is 80 of the replacement
  value.
• Properly estimating the value of personal
  property
• Normally, personal property is insure at 50 of
  the amount that the home is insured for.
• More coverage is available for a higher premium.

12
Insurance Premiums

• Factors used to determine premiums
• The number one factor is the estimated danger of
  loss based on the insurance companys past
  experiences.
• These are the other factors used in figuring the
  premium
• The value of property insured.
• The construction of the building brick, wood, or
  concrete
• The type of policy (basic, broad, or special)
• The number of perils covered
• The distance to the nearest fire department and
  water supply
• The amount of deductible (the higher the
  deductible, the lower the premium)

13
Making a Claim

• Make an Inventory list -
• The original cost of each article
• When the article was purchased, and
• How long the article is expected to last
• Depreciation - the decrease in value of an
  insured item.
• Replacement Insurance - actually replaces the
  item that has been destroyed.
• Adjuster - This is the representative of the
  company that will look at the damaged property,
  determine the extent of loss, and pay you
  according to the terms of the policy.