Property Insurance Facts

A business or property comes under insurance cover when it is protected from the loss or destruction due to catastrophe. If one is entrepreneur then insuring his/her business’ material assets are advantageous option for him. Insurance acts as a safety measure to secure commercial properties from damage caused by unfortunate events.

Types of Property Insurance Policy

There are two different types of policies by which your properties can be insured:

  • The first is named peril policy – basically limited, this policy spells the type of catastrophe it covers that means the insurance will only pay the cost of damages caused by accidents that are mentioned in the contract.
  • Open or all-risk peril policy – Excluding earthquake and flood, this policy covers all types of disastrous events. The coverage of this policy is more comprehensive as compared to named peril plan.

Additional Coverage

Additional coverage can be purchased by a business owner which may require some extra cost for the premium, but you can be assured that your business property is protected by all means. Other coverage that one can add in the property insurance plan are:

Debris removal insurance – This type of insurance covers the costs involved in debris removal due to fire, flood, explosion, hurricane and other calamities.
Building code upgrades insurance – This type of insurance provide coverage on upgrades or repair of the damaged building struck by disaster.
Boiler and machinery insurance – This type of insurance covers the costs of equipment, machinery, boilers’ breakdown along with replacement of damaged properties caused by the malfunction.
Inland marine insurance – This type of insurance reimburses damages or losses to other people’s property found within your premises or while
being in transit Extra-expense insurance – This type of insurance compensates the costs of temporary business relocation.
Business-interruption insurance – This type of insurance indemnifies loss of profit, salaries, debts when the business operation is interrupted due to a tragedy.

The type of policy and the perils listed on contract decides the premium cost of insurance. The factors like nature of business and location of business also affect the premium price. While deciding the premium the insurance company identifies the kind of risks your business is exposed to, depending upon these risks it decides the amount of insurance plan.

The insurance company pays you in the following three ways according to the type of policy you have procured for damage of property:

Replacement cost – Regardless of depreciation of the damaged property the actual cost of the item is replaced.
Extended-replacement cost – Extended-replacement cost replaces the damaged property above the coverage limit of cost stipulated in the policy.
Actual cash value – The actual cash value reimburses the replacement cost with deduction for depreciation of the affected property.

About HUS

HelpUSell Properties is a website based on real estate services providing articles and resources in different topics such as 2nd mortgage, property for sale, appraisal, refinance mortgage rates, foreclosure, housing market, bad credit, and more for home owners and future home owners.

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