Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance.
Property is insured in two main ways—open perils and named perils.
• Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war.
• Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion, and theft.
You will need to make a decision about how to insure your belongings and choose coverage options to suit your individual replacement needs. There are mainly two types of insurance coverage—Replacement Cost and Actual Cash Value. Many of your belongings will decrease in value over time, so it's necessary to consider which to choose.
• Replacement Cost coverage pays the cost of replacing your property regardless of depreciation or appreciation. Premiums for this type of coverage are based on replacement cost values, and not based on actual cash value.
• Actual Cash Value (ACV) coverage provides for replacement cost minus depreciation. This coverage option may allow for the insured item to be replaced with a used item but not always a new one. Premiums for Actual Cash Value insurance coverage though generally cost less than those for the Replacement Cost coverage option.
It is a good idea to walk around your home and look for items that you spent a lot of money on, or that have appreciated in value since you got them. Taking a picture to record those items financially or personally important will help you ensure they are protected properly.
Don’t forget to check for complaints or problems with the insurance agents that you are considering. Most states have an insurance commission website that you can check to see if an agent has any complaints against him. If an agent has several complaints, you should be skeptical about working with him. You also should check with the insurance agent to make sure that his license is up to date. Once you have found an agent that you feel comfortable with and has the products you need, make a selection and move forward.