Property Insurance

1. Property Insurance Intro to Business Chapter 34

2. Insuring Valuable Property • Protect yourself from financial loss on your property with property insurance • Almost everyone (at some point) has his/her property damaged or stolen • Earth quakes, fires, floods, hurricanes, etc.

3. Types of Property Insurance • Real Property – attached to land, like a house, business, garage • Personal Property – can be moved, like furniture, jewelry, electronics, etc.

4. Renter’s Insurance • Building owner will carry property insurance • Won’t cover loss or damage to renters property • Covers personal property in the apartment such as TV's appliances and furniture • Can also include liability protection in case someone is injured in your apartment

5. Standard Fire Policy Fire accounts for 85% of all property damages Many people buy a standard fire policy to insure against damage due to fire or lightening Can opt for extended coverage to protect against damage from riots, car/plane crash, windstorm, hail or even vandalism

6. Other Types of Prop Ins • Liability Protection – protects you from the costs of injuries to others on your property • medical expenses &legal costs • Additional Living Expenses– it pays for the cost of renting another place to live if your home is damaged • Limited Coverage (10-20%, 6-12 months) • Business Insurance– cover the costs of property and liability to protect themselves from claims by anyone injured on the premises

7. Homeowner’s Policy • Homeowner’s Policy – provides protection against loss from the eleven perils. • Eleven Perils – the most common causes of property damage or loss

8. 6 types of HO Policies • HO-1 Basic Form • Basic, least expensive • Protects against 11 perils, covers liability insurance, and temporary living expenses • HO-2 Broad Form • Most popular, adds 7 additional types of coverage including, ice or snow damage, internal pipe damage causing water damage, electrical fires and falling objects • HO-3 Special Form • Maximum protection for house itself, less coverage for contents

9. 6 types of HO Policies • HO-4 Renter’s Form • Covers personal property • HO-5 Comprehensive Form • “All-Risks Policy” It insures a building and its contents with maximum coverage, most expensive • HO-6 Condo Owner’s Form • For condominium owners, covers personal property and anything else inside the unit

10. Special Coverage • Rider– an addition to the policy that covers specific property or damages, often used for jewelry, art or antiques • NONE of the homeowner’s policies cover loss from floods, earthquakes, landslides, war or nuclear hazards • If you live in a flood zone, you must purchase flood insurance (if you have a mortgage)

11. Amount of Insurance • 80% of its market value • Recommended by Ins Co. • Even floods or fires do not destroy land or foundation • As property value increases, so should your amt of ins • Insure property for its actual cash value or its replacement cost – full cost of repairing or replacing property

12. Cost of insurance • Similar to Auto Ins • # of claims affects the overall cost • Premium depends on the amount of coverage and the type of policy you want • Factors that affect price: • Deductible, location, type of building, preventative measures

13. Cost of insurance • Deductible – amount out of pocket before insurance kicks in • higher deductible = lower premium • Location – urban areas cost more, access to fire dept. and hydrants • Type of building – brick will cost less than a house constructed of wood • larger house = higher premium • Preventative measures – discounts for burglar alarms or smoke detectors, deadbolts and sprinkler systems