Property insurance is a major term of a series of policies that offer either property protection coverage or liability coverage for property owners. Property insurance provides financial compensation to the owner or renter of a building and its belongings in case there is damage or theft and to an individual other than the owner or renter if that individual is injured on the property.
Property insurance can include a wide variety of policies, such as renters insurance, flood insurance, homeowners insurance, tsunami insurance and earthquake insurance. Personal property is generally covered by a homeowners or renters policy. The exception in personal property which has very high value and is expensive is usually covered by buying additional policy called a “rider.” For a claim, the property insurance policy will either compensate for the actual value of the damage or the replacement price to fix the problem.
Replacement costs reimburse the cost of repairing or replacing property at the same value. The coverage depends on replacement values rather than the cash value of items.
Actual cash value coverage reimburse the owner or renter the replacement cost minus depreciation. If the damaged item is 8 years old, you get the value of an 8-year-old item, not a new one. if extended replacement costs are chosen, they will pay more than the coverage limit in case costs for construction have gone up; however, this usually won’t be greater than 25% of the limit. When you buy a policy, the limit is the maximum amount of advantage the insurance company will pay for a given occurrence or situation