Property Insurance

Property insurance covers losses caused by events such as fire, theft, storms, water damage and vandalism, depending on the policy. It is used by homeowners, renters, landlords and businesses.

Home insurance typically has two parts: buildings insurance, covering the structure of the property, and contents insurance, covering possessions inside. Renters usually need only contents insurance, since the landlord insures the building. Businesses insure premises, stock, equipment and sometimes the income lost while damaged property is repaired, called business interruption insurance.

Policies pay out in different ways. Replacement cost cover pays the cost of replacing items with new equivalents. Actual cash value cover pays the item's value after depreciation, which is usually less.

For example, if a fire damages a kitchen, a homeowner's buildings insurance would cover repairs to the structure and fittings, while contents insurance would cover damaged appliances and belongings, both minus any excess.

Property insurance policies list covered perils and exclusions. Flood and earthquake damage are often excluded from standard policies in some countries and must be insured separately. Underinsuring property can lead to reduced payouts.