Property insurance encompasses protecting property against perils such as fire, flood and theft. When thinking of insurance, peril is the cause of a loss from things such as tornadoes or fire while a hazard is a condition that magnifies the chance of a loss due to a peril.
Insurance companies have been protecting people and businesses for centuries, and they've seen risks, hazards and perils you never dreamed you had.
Insurance companies are well prepared to protect you from many common perils with a standard policy at a reasonable price. An important consideration is what your policy covers and how it works. An annual review of your insurance policy with your agent will ensure you need what you're paying for and that no new risks have emerged.
To avoid spending money on coverage you don't need, consider carefully the various types of property and casualty insurance policies customarily available before you talk to your insurance agent.
When purchasing insurance it is important to know ahead of time what possessions you have that need to be protected. Walk around your home making a list of everything you have or that holds value to you. A better way of inventorying your home is to use a video camera. Walk through each room of your home, including attics, basements and sheds and pan across the room mentioning anything of importance. Be sure to make a copy of the tape and keep it in a safe place such as a safe deposit box.
Ensure your insurance covers these four key areas:
1. The structure of your house
2. Your belongings
3. Your liability to others
4. Your living expenses if you're forced out
The purpose of your homeowner's policy, and the reason for making a list of your belongings, is to ensure that if there's a disaster, you can rebuild your home and replace everything in it. Also you need enough liability coverage to protect you in case someone has and accident on your property and sue you. Living expenses cover the cost of making your home livable or living elsewhere while your home is being repaired or rebuilt.
