Even though property insurance may not be mandatory for everyone, like car insurance, that does not mean it’s unimportant. Property insurance could mean the difference between being completely broke and having peace of mind and money in your bank account. Of course, we all hope nothing bad will happen to our homes, but bad things do happen sometimes. Having property insurance can help you with the costs associated with simple accidents or catastrophes that happen in and to your home. So, what does property insurance cover? Here’s what you need to know.

What is Property Insurance?

Before we get into what property insurance actually covers, let’s properly define it.

Property insurance refers to a variety of policies that protect properties such as private dwellings, businesses, and other organizations against damage and loss.

Property insurance is meant to give policyholders peace of mind and help them recover from unfortunate situations such as burglary, fire and other perils.

For example, if your property and its contents were damaged by fire, you can be compensated if your policy covers fire damage.

If you don’t have property insurance, you will be forced to get the funds to fix the damage and replace your belongings out of pocket.

In some cases, you’re legally required to have property insurance.

In Trinidad, if you have a mortgage, you’re legally required to have homeowner’s insurance to cover repairs and structural damage.

It’s worth noting that property insurance is available to both homeowners and renters alike.

What Does Property Insurance Cover?

What property insurance covers depends on the type of policy that you hold.

Property insurance can cover damage to buildings and contents due to a covered cause of loss, such as:

• Fire
• Flood
• Burst pipes
• Some weather damage
• Natural disasters

Property insurance is especially important in the Caribbean, where people are susceptible to natural disasters like hurricanes and floods.

As an example, if you have property insurance, and Trinidad is hit by a hurricane your home and belongings will be financially protected, so you can rebuild and recover without shouldering the entire financial burden.

2. Property insurance also protects you from theft, whether you rent or own your home.

So, if someone burgled your home and your policy covers theft, you can be compensated. You may be reimbursed in cash to replace your belongings.

3. Finally, having property insurance can protect you from liabilities.

For example, if one of your house guests gets injured on your property, you may be liable.

Therefore, property insurance can help you cover medical expenses, legal fees, and other related costs without breaking the bank.

Types of Property Insurance

There are several different types of property insurance.

Here are the ones GenAc TT has available:

• Homeowner’s Insurance-This type of comprehensive coverage covers interior and/or exterior damage in the policyholder’s house. It also covers the loss of assets, loss or damage of personal assets, and injury that arises while on the property. The sum insured of your policy must reflect the replacement costs of your building or contents, and a valuation from a reputable valuator will provide this information.

• Commercial Fire– If your business was affected by fire or lightning, this insurance could save you the headache of rebuilding. The coverage provided can be for Fire and Lightning only or extended to include any or all of the specified perils we offer.

• Property All Risks- An extension of the standard fire and perils policy, the Property All-Risks policy provides additional coverage for burglary and accidental damage.

• Business Interruption- Business Interruption cover (or Loss of Profit or Consequential Loss Insurance) allows policyholders to recover loss of profit due to an insured risk or peril. This policy allows recovery from a reduction in turnover and reasonable additional expenditure incurred following a material damage loss. The Business Interruption cover exists to follow insured perils within the fire or property policy — this means that ONLY when a loss occurs on the fire or property policy, this policy will be activated. The coverage can be extended to include auditor’s fees, payroll, and increased work costs due to reduced business turnover.

How do you choose the right property insurance?

Choosing the right property insurance for you and your needs requires some thought.

When choosing property insurance, consider:

• Your coverage needs namely the buildings you’d have to insure and what you have in the building.
• The cost to insure your property
• Type of coverage
• What is included in the policies, and how they best suit your needs
• The flexibility of the policy
• What you’re legally required to have

Understanding what your policy covers, what it doesn’t, and how it can best serve your needs is the key to making an informed decision and feeling confident in your choice.

Even after choosing a policy, it’s a good habit to review it periodically to ensure it’s still meeting your needs.

We recommend talking to your broker, agent, or any of our friendly and helpful customer service representatives for more information on how to classify your property and what coverage to get.

FAQs

1.      What Is the Difference Between Homeowners Insurance and Property Insurance?

The main difference is that Property Insurance is usually for commercial policies while homeowner’s insurance is for private individuals. Homeowner’s insurance is also required for every mortgage holder but property insurance is not a requirement for other buildings. Finally, homeowner’s insurance is only for homeowners but renters can get access to property insurance.

2.      What Is Not Covered by Property Insurance?

What isn’t covered by property insurance is usually dependent on your policy. However, things that typically aren’t covered include:

• Normal wear and tear of your home and furniture
• Car damage or burglary that happens at an insured property
• Certain weather events or natural disasters

3.      What Are the Main Categories Covered Under a Homeowner’s Insurance Policy?

Under our Homeowner’s Insurance Policy, we cover:

• Interior and/or exterior damage
• Loss or damage of personal assets
• Injury that arises while on the property

For more information on property insurance, browse our blog.

Suggested reading: The importance of property insurance for homeowners and renters

Four Myths about Home Insurance