What does Property Insurance Protect?
Hi, I’m Jerry Becerra with Barbary Insurance Brokerage and the question is what does property insurance protect. Insurance companies like to divide property into several categories the first being real property. Real property might include your home, a commercial building, an apartment building, anything that has to go through an escrow closing. Second category is personal property. personal property includes general contents, inventory, tools and equipment and finally the third category is loss of use of the property. So if there were damage to your home you might have to live elsewhere or if there was damage to your commercial property you may not have income coming from the use of that property and all of that can be covered under insurance too. The basic coverage includes fire, lightning and removal of the damaged property from the premises. Nobody buys basic coverage but you may see a category called broad form. Broad form includes windstorm, hail, aircraft and vehicle damage, riot, vandalism and malicious mischief, explosion and smoke damage. And finally the most preferred category would be called special form. Special form which people used to call all risk coverage covers everything but the exclusions. Therefore you’re going to get coverage for things that collapse with the building, glass breakage or coverage for a burst pipe in the building. It’s important to remember that all of the coverage is based on accidental and sudden damage. So if it’s a condition that exists over a long period of time like a slow leak that causes dry rot there may not be coverage for that under the property form. The exclusions typically are earthquake, flood, hurricane if you’re in a windstorm area, wear and tear, vermin like termites or mice, fraud or dishonesty. Some property needs special coverage for instance, mobile equipment, money and securities, precious metals and stones and fine arts. That’s the basics of property coverage and what it covers.