Wednesday, September 17, 2014

Property Insurance Comes In Many Varieties

Property insurance is a fairly straightforward concept that can become confusing if you don't know what kind of policies protect against which kinds of perils. In general, if you own property of any kind, it could face damage or destruction or its use could result in damage or destruction to other people's things, such as a car, truck, van or other vehicles that is wrecked during an accident. In such cases, a good insurance plan will pay to costs to repair or replace the damaged or destroyed items up to policy limits and minus any deductibles that might apply.
Another threat people who own things face include if someone is injured or killed due to some sort of use involving the insured property. That could mean something as simple as a slip and fall while coming or going or could be more serious, such as a permanent disability or worse, death, resulting from the use of the insured item or parcel. And that could leave the owner in serious financial trouble without the right kind of protection in place. Without the proper coverage, it would be possible to lose virtually all assets and even future earnings if facing a lawsuit resulting in a large judgment against the owner.
Fortunately, insurance can reduce the risk of going bankrupt or losing everything due to liability arising from use of an insured item or parcel. Liability of course, is the legal obligation to care for what is owned and ensures others are not harmed or their things damaged while on an insured parcel or other tangible asset, such as a home or car. And when liability coverage is in place, the policy will pay up to its limits for the injuries or damages.
In addition to monetary limits, there are other limitations on such policies. A deductible typically would apply in the event of a total loss or damage to the insured item, home or parcel. A deductible is designed to keep litigation at a minimum and stop the potential for several claims being filed as a result of small incidents that inflict only a small amount of monetary loss to the policyholder. Deductibles might range from zero dollars to $1,000 or more on a car, for example. And possibly even higher for a home or other insured parcel. And if the insured item is harmed, the policyholder must pay for those costs rather than file a claim if they fall within the range of the deductible.
Deductibles do not apply if causing injury or damage to somebody else or their property, which prevents yet more possible lawsuits from being filed and running up costs even more than they already might be. Deductibles are designed to reduce costs for insurers as well as policyholders and can make rates more affordable when purchasing coverage.

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