The reason why property, or homeowners, insurance is encouraged is for protection and compliance. The protection aspect of insurance becomes paramount when loss or damage occurs on the property. With insurance coverage, there is a source of compensation if and when the damage occurs. The compliance aspect becomes needed as the law requires that property should have insurance coverage to cover any injury or loss that may occur within the property’s boundaries.
Purchasing property insurance that has the right protection and compliance clauses is quite tricky as these two are directly related to the cost of the insurance coverage. This cost is called the premium and this is the expense that many property owners would bear during the pendency of the insurance cover. The following are the tips in purchasing property insurance with the right protection and compliance clauses.
Review the insurance offered. The first step in purchasing property insurance is to determine the coverage provided. One part of the coverage is directly related to the location of the property, be it within a brushfire belt or hurricane alley. These characteristics of the property location, including its proximity to a body of water would require special kinds of insurance coverage. Thus, your insurance cover may require fire, hurricane and flood insurance. The key here is reviewing the cover if it appropriate to the property to be insured. Having an inapplicable insurance clause, such as flood insurance when the property is at the middle of the desert, would mean a waste of resources in the purchase of the offered insurance cover.
Reviewing the current income. Many fail to see that insurance coverage is an investment for the future and not a mere burdensome expense. Payment of the premiums of the insurance is one’s way of protecting a risk that may occur in the future. Failure to pay for the premiums would mean putting yourself and the property at greater risk since the loss would mean a non reimbursable loss. It is important that one’s income is reviewed and double checked in order to be updated on the payments of the insurance premium. Failure to pay may mean forfeiture of previous payments as well as loss of the protection and compliance clauses that insurance coverage provides.
Reviewing the coverage with the insurer. When you are offered insurance coverage, it is important to review all the clauses of the insurance with your broker or agent, as this clarifies much of the legal jargon used in insurance policies. Control the conversation and as the client, you are entitled to asking all the questions to be enlightened as to the contract you are entering as well as the benefits you are entitled under the coverage.
As can be seen, insurance is one part of property ownership that is mandatory under the law. Property, or homeowners insurance, is complex, so proper review of the cost, coverage and benefits is essential to be put at ease that your property is amply protected as well as compliant with the precepts of the law.
For a more comprehensive discussion on property insurance coverages, do visit us at Property Community.