What is Property Insurance? And Do You Really Need It?

real estate

Property insurance is a catch-all term for a range of different insurance policies that can be taken out by both renters and homeowners.

It is useful to safeguard against theft and damage, as well as to pay out to third parties should they get injured on the property. There are so many different permutations of property insurance; costs can vary greatly and individuals can tailor it to their specific needs.

Individuals can find anything from renters to homeowners insurance, and different types of catastrophe and act of God insurance. Different limits for personal property can be set depending on needs, and high-value items such as jewellery and electronics are usually an add-on to the main policy.

Why is it important?

Property insurance should be carefully considered; it should be commensurate with the buyers’ needs otherwise it becomes useless. Property insurance will often pay out following an unexpected occurrence, such as a tree falling through the roof, flooding following a storm, or a break-in where items are stolen from the house. It is key that insurance covers what is needed, nothing more and nothing less, otherwise individuals may be paying over the odds for coverage they don’t need, or when they come to make a claim they will find that their insurance does not actually pay out.

However, property insurance is vital; it safeguards individuals and their property, ensuring that should the unexpected happen homes will still be liveable, and liability for injury will be covered, avoiding lengthy lawsuits and potential bankruptcy. With so many different options for property insurance, most providers offer options of searching for tailored quotes.

How to get Property Insurance

In order to get insurance for your property, you will first need to find a provider who will insure you, and get a quote from them to find out how much the insurance will cost you. To give a customer a quote, insurance providers will assess how much of a liability they think the individual is (i.e. how likely there is to be a claim by assessing the size of the property, location, previous claims and so on), and then offer a quote that matches the risk. This process is made much faster by the innovative technology that online insurance companies use to calculate these quotes, therefore saving you time as the consumer. Click here to find out more about some of the insurance policies available to you.

Different types of Insurance: a brief overview

·       Homeowners

With homeowners outnumbering renters in the US two to one (except for amongst 20-somethings, who are more likely to rent), this is one of the most popular types of insurance out there. It usually covers any damage to the building itself (inside and out), contents, as well as liability for death or injury to those on the property. Landlords may also need to take out some aspect of this insurance when renting their property out.

·       Renters

When renting a property, the renter’s personal items will not be covered by the landlords insurance, and they will be required to take out contents only insurance. The landlord will still be liable for insuring the building. So, if there was a fire, the landlords insurance would cover the building, and the renters insurance would cover the items belonging to the tenant.

·       Catastrophe Insurance

Damage caused by things like floods, hurricanes, sink holes, and earthquakes tend not to be covered by basic homeowners insurance, and additional polices need to be taken out to cover this. In California, there is government intervention to ensure that earthquake coverage remains affordable, and flood insurance is provided by the federal government. This type of insurance can sometimes be referred to as Act of God insurance, and will cover things such as volcanic eruptions, earthquakes, tornadoes, hurricanes, and associated damage. As well as covering act of God, catastrophe insurance also covers man-made disasters, such as terrorist activity, war, and civil disorder.

·       Additional

Most insurance policies will allow individuals to add on/top-up their policies to increase the value of the coverage, insure high value items, and reduce the excess paid.


In a nutshell, having the correct insurance and the right level of coverage is vital to protect property and the individual; proceed without it at your own risk!

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