Property insurance is designed to protect you financially when there is damage to your property OR a liability claim.
Whether the property is a home, mobile home, rental, or a business – having the correct coverage can protect you from a major financial blow.
Property insurance comes in TWO parts.
The first part is coverage for the property itself.
– Make sure that you have enough insurance to completely rebuild or replace damaged property. You will have to pay a deductible but the insurance company will take care of the rest for you.
– Make sure you know what is and is not covered. Fire, theft, wind, hail, lightening, vandalism, and explosions are all routinely covered. However, if you want coverage for earthquakes, water backup or flood you will either need an endorsement or separate policy.
– If you have more collectibles, guns, jewelry, furs, musical instruments, etc. than the average person, you may need to get an endorsement to cover these because most policies have limits on specific types of property unless you are willing to pay extra to be fully covered (these endorsements also cover accidental loss).
The second part is the liability part of the policy.
– Medical payments – basically this is "bribe money" – most people who are injured or become ill are willing to settle for the actual costs of treatment instead of going to court to sue. Make sure you have enough for basic emergency room treatment and followup. I personally recommend a minimum of $2,000 but many companies will offer up to $10,000.
– Liability – someone has been injured, gotten sick, died or had their property damaged while on your property OR as a result of an action by you OR a family memeber. This includes a wide variety of circumstances. Everything from common problems like someone falling on your property, dog bites, and accidental drownings to some of the more esoteric problems like your 5 year old running in a store and knocking down an old person who breaks their hip – YES, YOU are legally liable and YOU could lose everything paying for the legal judgement IF you do not have enough liability insurance. My personal recommendation is a minimum of $300,000 or as much as you can afford. If your insurance company does not have a million dollar liability option, get an umbrella policy which will give you an EXTRA million dollars of protection for $150 – $300 per year. US courts and juries are routinely awarding an average of $950,000 anytime someone is disabled or killed and someone else is found liable.
Protect yourself and your family by having enough coverage.