Property Insurance

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The Property Insurance provides the policy holder protection against the risk to the property such as fire, theft or damage due to the weather. The specialized forms of Insurance like Fire Insurance, flood Insurance, Earthquake Insurance, home Insurance are included in the Property Insurance. The property is basically insured in two ways, which is as follows:

1. Open Perils
2. Named Perils 

In the case of property insurance with open Perils all the causes of loss which are not specifically excluded in the policy are covered. The specific exclusions found in most of the insurance policies include loss due to earthquake, floods, Nuclear Incidents and wars. In the case of policy with Named perils the claim amount will be given to the insured if and only if the loss has occurred due to the cause which is listed in the policy. The most common named perils include huge damage causing events like Fire, Floods, Explosions and thefts.

The concept of Property insurance grew in prominance in the year 1666 when the Great Fire Of London caused huge destruction and Burned approximately 13500 houses. From that point of Time the Property insurance is considered as a necessity rather than luxury.

There are basically there types of Insurance Coverage which are as follows :

• Replacement Cost Coverage 
• Actual Cash Value Coverage
• Extended Replacement Cost Coverage.  

In the case of Replacement Cost Coverage Policy the Insurance company pays the cost of replacing the property without giving any effect to the depreciation or appreciation. The premiums are charged based on the replacement cost. If the Actual Cash Value Coverage is taken the Insurance company will pay the Replacement Cost - Depreciation.  The Extended Replacement Cost Coverage will pay pay over the limit of the Coverage if the cost of Construction has drastically increased.