Property is the stuff of dreams whether it is a house with a white picket fence or a condo by the beach.  And it doesn’t hurt that property in a good location can appreciate in terms of value. But, being the proud owner of property is only the beginning. You have to maintain and insure that property, which has both advantages and disadvantages that you need to keep in mind.
Protect Yourself from Loss Due to Disaster
The major advantage of property insurance is that most policies insure the property and its contents from natural disasters such as fire, thunderstorms, hurricanes, and the like. Many policies also take theft into account, which can be disastrous if you do not prepare for it. If your home or the contents in it get damaged, your insurance company will replace the items. This is great for times when you may be completely unprepared for disasters of both natural and human varieties.
One thing to note though: make sure your policy covers these damages. Many insurance companies shy away from including personal possessions in the coverage or may require a separate rider. Also, floods are generally not covered except under separate (extremely expensive) flood insurance policies and in earthquake-prone areas, you may require special catastrophe coverage.
Personal Liability Protection
Many property insurance policies will protect the landowner against lawsuits if someone gets injured while on his or her property. Personal liability protection will pay for bodily injury or damages. Additionally, many insurance companies will help you hire a lawyer to defend yourself in case someone sues you. Getting this type of aid is priceless during emergencies.
Peace of Mind
Property insurance can give you peace of mind. There is nothing greater in life than not having to worry about any unforeseen disasters or theft. If you have proper coverage, your property insurance will take care of these disasters. All you have to make sure is that you are covered. Also, you do not have to worry if things like your laptop get stolen from your house or even your car. Additionally, you do not have to stress over the medical bills if someone gets injured on your property. With the right kind of insurance, you will also be protected in case anyone sues you for such problems.
The Dark Side
However, as with other things, property insurance has a dark side. First of all, the major disadvantage of having property insurance is that it can be very expensive to maintain. Also, most insurance policies are very basic, and you have to add coverage for natural disasters, theft, and other such things to your policy for it to be comprehensive. All these additions can be pricey to maintain every month.
On top of all this, to submit a claim, you will need to maintain proper records of your purchases. This can be burdensome for some people since it requires a level of organization and record-keeping. Many insurance companies will use bureaucratic tricks to deny property owners their claims, so keeping a lot of documentation and proof of ownership will be of utmost importance in case of thefts and disasters.
Finally, many insurance companies will not transfer the coverage if you move. This is not a problem for those looking to settle down but can prove to be problematic if you wish to move elsewhere across the country or even down the road.
All in all, the benefits of maintaining insurance far outweigh the disadvantages when it comes to property insurance. Plus if you have a mortgage or other debt obligation you may not have a choice but to maintain insurance coverage to protect the lender should something disastrous happen to your house.
See Also:
- 2 Types of Mortgage Insurance
- Term vs. Whole Life Insurance – What Should You Choose?
- Flood Insurance
- Why Insurance is Not a Luxury
- Liability Insurance
Recommended By Amazon:
- Insurance for Dummies
- Dictionary of Insurance Terms
- Questions and Answers on Life Insurance: The Life Insurance Toolbook
Image courtesy of Danilo Rizzuti / FreeDigitalPhotos.net
