Property Insurance is a Necessary Coverage to Have
When you own property, it’s a good idea to carry property insurance. The most common types of property insurance that most people have are homeowners insurance, auto insurance and renters insurance. In many cases, you may be required to carry one or more of these policies, but even if you aren’t, it’s a good idea to have them to protect the property you own.
About 95% of all homeowners carry home insurance, and that’s largely due to the fact that anyone who carries a mortgage is required by their lender to insure their home. Renters insurance is much less popular, with only slightly more than one-third of renters carrying it. Renters insurance is relatively inexpensive compared with other types of property insurance, but most landlords do not require their tenants to carry it. Auto insurance is also nearly ubiquitous, also because it is required. Nearly every state requires drivers to carry liability insurance, which is a minimum level of coverage, and people who have a loan on their car or is leasing a car is required to carry full auto coverage.
Homeowners insurance typically covers things like wind and hail damage, damage caused by a fire and theft. It typically does not cover flood damage or damage from earthquakes. Renters insurance covers offers similar coverage and exclusions. With auto insurance, what you are covered for depends on what coverages you have. Liability only covers damage you cause to other people’s property. To cover your own car you need collision, which covers damage to your car caused in a crash, and comprehensive, which covers damage to your car that’s not from a crash, such as weather or fire damage.
There are several factors that can affect how much you pay for homeowner insurance or auto insurance. With homeowners insurance, where you live, your claims history, how much coverage you have and your claims history can all play a role in setting your rates. With auto insurance, there are many more factors involved. Insurance companies consider your age, your sex, your driving record, what kind of car you have and a number of other factors, many of which are out of control.
There are other types of insurance besides property insurance. Two of the most common are life insurance and health insurance. You often can get additional insurance discounts by getting more than one policy from the same insurer, a process called bundling. For example, you might get your home and auto insurance from the same insurer or you might bundle your home and life insurance policies.
Property insurance is important, and even if it isn’t required by a lender, it’s something you should carry to protect the investment you have against loss.
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