If there are fire, flood, and storm damages to the physical structure of your home and property, Only Property Insurance can cover you for everything:
There are three types of Property Insurance coverage: replacement cost, actual cash value, and extended replacement costs:-
- Replacement cost covers the cost of repairing or replacing property at the same or equal value. The coverage is based on replacement cost values rather than the cash value of items.
- Actual cash value coverage pays the owner or renter the replacement cost minus depreciation. If the destroyed item is 10 years old, you get the value of a 10-year-old item, not a new one.
- Extended replacement costs will pay more than the coverage limit if the costs for construction have gone up; however, this usually won’t exceed 25% of the limit. When you buy insurance, the limit is the maximum amount of benefit the insurance company will pay for a given situation or occurrence.
Check your policy to see exactly what it includes. You can always add-on extra cover.
Who is Property Insurance for?
- If you’re a homeowner with a mortgage, your lender will usually insist that you have adequate Property Insurance cover for the term of your mortgage – that is, while the mortgage company has an interest in the property. You’ll typically need to have Property Insurance in place on the date you exchange contracts, as this is when you become legally responsible for the property.
- If you don’t have a mortgage, there’s no legal requirement to have Property Insurance – but remember that repairs to your home can be very expensive. Taking out a Property Insurance policy could save you money in the long run and might give you peace of mind too.
- If you’re renting, then it’s usually your landlord’s responsibility to have Property Insurance in place – the only thing you need to worry about as a tenant is your own Personal Insurance.