ABOUT PROPERTY INSURANCE

Every risk involves the loss of one or other kind. In older time, the contribution by the person was made at the time of loss. Today, only one business, which offers all walks of life, is insurance business. Owing to growing complexity of life, trade and commerce, individual and business firms and turning to insurance to manage various risks. Every individual in this world is subject to unforeseen uncertainties which may make him and his family vulnerable. At this place, only insurance helps him not only to survive but also recover his loss and continue his life in a normal manner. Insurance is an important aid to commerce and industry. Every business enterprise involves large number of risks and uncertainties. It may involve risk to premises, plant and machinery, raw material and other things. Goods may be damaged or may be destroyed due to fire or flood. Some risk can be avoided by timely precautions and some are unavoidable and are beyond the control of a business. These unavoidable risks can be protected by insurance. What is Insurance In D.S. Hamsell words, insurance is defined “as a social device providing financial compensation for the effects of misfortune, the payment being made from the accumulated contributions of all parties participating in the scheme” In simple terms “Insurance is a co-operative device to spread the loss caused by a particular risk over a number of persons, who are exposed to it and who agree to insure themselves against the risk” Thus, the insurance is (a) A cooperative device to spread the risk; (b) the system to spread the risk over a number of persons who are insured against the risk; (c) the principle to share the loss of the each member of the society on the basis of probability of loss to their risk; and (d) the method to provide security against losses to the insured Insurance may be defined as form of contract between two parties (namely insurer and insured or assured) whereby one party (insurer) undertakes in exchange for a fixed amount of money (premium) to pay the other party (Insured), a fixed amount of money on the happening of certain event (death or attaining a certain age in case of life) or to pay the amount of actual loss when it takes place through the risk insured (in case of property) I have written in my last post the meaning of property insurance and its importance also. Our houses and properties are one of the most valued assets we have so it supposed to be well protected with property insurance. Property insurance also covers the damages you encounter in natural disasters like the earthquake that affects your home. Your property insurance premium is paid monthly in some of the countries, depending on your location along with your monthly mortgage payment. One of the importance of property insurance is that in some states you need to have property insurance, like home insurance to get a loan from most of the mortgage companies. But even though that you don’t have a mortgage, try as much possible to get your property insurance. You can as well top up your insurance at any time as your condition changes. Many people get an insurance policy from different companies so that their monthly premium will be low. I have previously written on the meaning of property-insurance/ and importance of property insurance factors to consider To know the cost of property insurance, there are certain things you need to consider. First get enough insurance to cover the 100% of the cost of rebuilding your home and properties when it gets damaged or destroyed. You can as well request for an actual cash value coverage which pays you the worth of the property that was damaged excluding depreciation or replacement cost coverage which is more preferable because it does not factor in depreciation. We also have extended value coverage that pays around twenty to thirty percent of your policy coverage limit. Therefore, $100,000 insurance policy might have $120,000 - $130,000 according to my research. But it is better to get a more comprehensive option that can cover 100% of the cost to maintain your home well. Also, try to know the content of your properties to know how much insurance you will want to cover. Expect to pay close to $35 per month for every $100,000 though it depends on your region. That is, people that are living close to the area that are prone to the disaster will pay higher than those living in the normal area. Also, people that add extra coverage to their policies like personal properties will as well spend more. Note that property insurance coverage can be given in a business owner’s policy by joining liability coverage’s and commercial property insurance. Businesses pay about $1,000 and $3000 per million dollars of coverage. While some may pay $1,000 annually with an average of $742. Remember that property insurance does not cover the war, because war includes terror attacks and damages from missiles or another machine of war as the case may be.
ABOUT PROPERTY INSURANCE ABOUT PROPERTY INSURANCE Reviewed by Huncho on January 11, 2019 Rating: 5

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