There are many new property owners that don’t understand the importance of purchasing and maintaining property insurance. The truth is, property insurance is one of the best ways to ensure that you, your family and your businesses are protected from financial liability in the event of a tragedy. Living in a ‘safe area’ is not a good enough reason to not have your home adequately insured.
4 Types of Property Insurance
Here are the four different types of property insurance. Consider them carefully, and ensure that you have an adequate insurance policy for the ones applicable to you and your property.
1. Homeowner’s Insurance
This type of insurance is one of the most common in Australia, and the one with the most claims. What you may not know, is that you can own a home without purchasing a home insurance policy. Which means if you haven’t sought one out, then you’re probably not insured! If you choose to forego home insurance, then some lenders may not choose to approve you a home loan.
Essentially, homeowner’s insurance is a type of property insurance that generally covers interior damage, exterior damage, loss or damage of personal assets as well as belongings and any injury that arises while on or in the property.
It is important to note that a homeowner’s insurance policy is different from a home warrant. A warranty covers any necessary repairs or replacements of home items and has an expiry date. On the other hand, homeowner’s insurance does not cover poor maintenance damage or wear and tear due to age and will not expire so long as you continue to pay your monthly payments.
A homeowner’s insurance policy is also different from mortgage insurance. Mortgage insurance covers the lender that is issuing you your home loan finance if the down payment is less than 20% of the property cost. Most lenders won’t lend less than 20% of the cost without a mortgage insurance contract protecting them. To simplify, mortgage insurance protects the lender and homeowner’s insurance protects the homeowner.
If you own or are buying a home, homeowner’s insurance is essential. When you really think about all of the many terrible, unavoidable things that could happen to your home, investing in home insurance will look more and more like a smart idea both short and long term. There are many different types of homeowner’s insurance available to you, that can suit a wide variety of living circumstances.
2. Commercial Property Insurance
If you are a business owner, you should feel compelled to purchase commercial property insurance. Commercial property insurance is used to cover an assortment of business property types, such as: manufacturing, retailers and more. This type of insurance generally covers commercial property owners from fire, theft and natural disasters. It can also assist with instances of being sued.
Many businesses that use major equipment and expensive tools often purchase commercial property insurance in order to protect their business and their property from costly damages. Usually, businesses can deduct the cost of their commercial insurance premiums as expenses.
If you want to ensure the safety of your business’s property in case the worst happens, then make sure you are insured. When you have a commercial property, an adequate insurance policy could save you considerable amounts of money in the long run should misfortune happen.
3. Flood Insurance
If you are a Queensland property owner, if you don’t already know that your home insurance policy doesn’t cover you for flood damage, then you do now. Homeowners insurance will cover you for some natural disasters, but others, like floods, are left out. If you have purchased a property within Queensland it is best to ensure that you have adequate flood insurance in preparation for any future major storms.
4. Natural Disaster Insurance
If you have home owner’s insurance or commercial property insurance you may be covered for some types of natural disasters. You need to read through your policy very carefully and ask your insurance provider to know what types you are covered for. Often, hail, hurricanes, tornadoes, earthquakes and other such natural disasters that can have a detrimental effect on your property, are not covered in your general property insurance policy. It is important that you are prepared for anything that nature throws at you, and investing in natural disaster insurance could just save you big.