Property Insurance
- Property insurance encompasses various policies: homeowners, renters, and condo insurance
- It protects your dwelling, personal belongings, and liability against risks like fire, theft, and certain natural disasters.
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What is property insurance?
Property insurance protects the things you own and the place you live. It’s what helps you recover if your home or belongings are damaged, stolen, or destroyed in a covered event. Policies like renters, homeowners, or condo insurance all fall under this category. Property insurance can also include liability coverage, so if someone gets hurt on your property, you may be protected.
Ever hear the term “P&C insurance” and wonder what it actually means? Here’s a quick breakdown.
Property insurance
Covers the stuff you own — like your home, car, or belongings — if they’re damaged, destroyed, or stolen. It helps pay to repair or replace things after unexpected events like fires, storms, or theft.
Casualty insurance
Protects you if you’re held responsible for hurting someone or damaging their property. It helps cover things like medical bills, repairs, or legal costs if you’re found at fault in an accident.
Different types of property insurance
Property insurance covers you, your home, and your personal property against loss or damage. Below are the most common types of property insurance.
Home insurance comprises five primary coverage types:
- Dwelling: This covers the replacement cost of a home. If the dwelling were to burn down, the insurance would cover up to the cost needed to rebuild — not necessarily the full value of the home.
- Other structures: This insures detached garages and fencing.
- Personal property: This covers personal belongings, including clothing, books, art, and electronics.
- Personal liability: If someone sustains an injury at your home or you’re sued, personal liability can provide assistance.
- Loss of use: If your home is deemed unlivable due to a covered loss, this coverage pays for the cost of living elsewhere.
Because you do not own your rental residence, renters insurance only covers your personal property and your liability. It’s not required by law, but renters insurance is a good investment in order to protect your personal belongings and cover your liability in the event of an incident at your rental property.
Condo insurance varies based on the details of your condo ownership situation. If you own your appliances and cabinets, your insurance will cover that. In general, a condo policy covers a unit's walls, floors, and ceilings. Condo insurance policies also include personal property coverage, liability, and additional living expense insurance.
Most standard home, renters, and condo policies exclude earthquake damage. You can either add coverage to your policy through an endorsement or purchase a stand-alone policy. Although earthquake insurance is not required, it is a good idea if you live in an earthquake-prone area.
Earthquake insurance only covers damage to your dwelling, personal belongings, and your additional living expenses.
Damage caused by floods is excluded from renters, homeowners, and condo insurance policies. Unlike earthquake insurance, homes located in flood plains are often required by mortgage agreements to carry flood insurance. Flood insurance is available through the National Flood Insurance Policy (NFIP) and some private insurance companies.
NFIP will cover costs of up to $250,000 to rebuild a home and/or up to $100,000 to cover personal property. Flood insurance typically does not provide coverage for additional living expenses.[1]
Now that we’ve outlined what property insurance is, let’s outline what it protects your home and contents against.
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What is covered by property insurance?
Earthquake and flood insurance policies are very specific about what they will and will not cover. But homeowners, renters, and condo insurance are a little different. The following are considered covered losses within standard property insurance policies:
- Lightning or fire
- Hail or windstorm
- Damage caused by an aircraft
- Explosions
- Riots or civil disturbances
- Smoke damage
- Damage caused by vehicles
- Theft
- Vandalism
- Falling objects
- Volcanic eruption
- Damage from the weight of snow, ice, or sleet
- Water damage from plumbing, heating, or air conditioning overflow
- Water heater cracking, tearing, and burning
- Damage from electrical current
- Pipe freezing
Bear in mind, this is a very general list. Depending on your property insurance policy, your list of covered threats could be more comprehensive.
Does Home Insurance Cover Natural Disasters? | The Zebra
Your home insurance coverage after a natural disaster depends on your location. Most natural disasters, hurricanes, floods, and earthquakes are not covered by homeowners insurance.
What isn’t covered by property insurance?
Earthquakes and floods are not covered by property insurance. Below are additional threats not covered by property insurance:
- Mold
- Acts of war
- Parts of the property in disrepair
- Intentional acts
- Earth movement/landslides
- Ordinance of law
Your specific policy will determine if you have more or less coverage, but the above list usually applies.
How are property insurance premiums calculated?
Property insurance rates are calculated using your personal information and information related to what is insured.
This includes:
- Your age
- Location
- Credit score (used to determine risk)
- Your coverage requirements
- The value of the insured asset, such as a condo or house
- Additional coverage options
- Claims history
If you own or occupy a residence, you should familiarize yourself with property insurance and verify you have appropriate coverage. Read more on property and casualty insurance.
How can you lower property insurance rates?
Property insurance rates, like car insurance, depend on several factors; some you can control, and others you can’t. Insurers look at things like your home’s location, age, construction type, and even local weather risks. They also consider your claims history and credit-based insurance score.
While you can’t change where your home is or how old it is, there are still ways to cut costs. Updating your roof, improving home security, or bundling your home and auto insurance can often lead to discounts. You may also qualify for additional savings if you stay claims-free, increase your deductible, or shop around for a better rate.
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