What is the difference between liability insurance vs property insurance? This is a common question as liability and property insurance often go hand in hand - and they can cover different aspects of the same things.
Liability Insurance vs Property Insurance
Insurance policies are often full of detailed information that few people read thoroughly. Most people are just happy to make it through the initial quote phone call.
It seems like information comes rapidly flying at you, with insurance industry jargon, from a fast talking representative.
When an event dictates the use of your insurance policy questions arise about coverage details. Common misunderstandings often revolve around differences between liability insurance vs property insurance.
Property Insurance - Your Home
Your home can suffer greatly in a fire, storm or flood. These are the main conditions where property insurance needs to be applied to the house itself. This falls under property damage. Small leaks or accidents may require out of pocket repair while the insurance covers the damaged areas. The idea is to replace damage that incurs because of the faulty item, not the item itself. If your air conditioner leaks and damages the ceiling, homeowner's insurance covers the ceiling.
The repair of the air conditioner unit is left to the owner. Flood insurance is, in many places, a separate policy. High risk areas may be difficult and expensive to insure. When calling for a quote be as specific as possible about water and fire damage. Mention damage caused by natural causes, appliances, and machinery.
Property Insurance - Your Belongings
The material items that are kept in your home are your personal property. This includes things like your furniture, electronics, and jewelry. It is a good idea to keep an inventory of pricey items. Expensive jewelry is often required to be appraised for insurance purposes.
Take pictures of each item and keep receipts if you can. Clothes and other lump sum items may be given an estimation before an insurance contract is finalized. Items in the home are replaced with monetary compensation after your chosen deductible is paid. Proper reimbursement is more likely when documentation of items is thorough.
Liability Insurance - Other People
Liability insurance covers a variety of accidents around the home. Falls and other injuries may be reported by the victims. If friends or family come to visit and get hurt they must participate in making the claim. An insurance representative usually interviews both parties and visits the scene. Claim compensation covers medical evaluations and treatment, if necessary. Loss of work due to injury may also be paid for. Some policies go so far as to offer money for pain and suffering. Liability insurance should be a priority, even if you are not planning to cover your property.
Liability insurance vs property insurance. There are many instances where people are involved in home based incidents. Liability insurance covers these situations. Your prospective insurance provider may ask you about children, pets, and number of residents. Coverage may cost more if you own certain dog breeds. It is best to be honest when describing your dog's temperament and breed. If a neighbor comes over and receives an injury from your pet, your insurance adjuster is responsible for determining the details.
When you are ready to purchase insurance for your home, make an appointment with an experienced representative. The goal of this phone call or meeting is to clarify your personal needs. This is the time to ask questions and explain exactly what you would live to have covered and what the difference is between liability insurance vs property insurance. Deductible amount and an estimate of your belongings are discussed during this conversation.
Have an idea of what you are willing to spend before you talk to a professional. This helps the consultant know where to start when building your policy. Most insurance companies offer a variety of coverage options. Liability insurance and property insurance can be combined - like in a homeowners or auto policy. This is the most popular choice. You can, however, sometimes choose one or the other.
You will also have to decide how much coverage you want. Insurance agents are experts and estimating the worth of your home and property. They can also give you an idea of what medical bills for injuries cost. It is advisable to aim high with the liability portion of coverage. Injuries often bring out the worst in people. Individuals determined to lay blame on your home or animals may become demanding.
Insurance coverage decisions require research and thought. The process can seem daunting, at times. Good coverage, however, is worth the effort. Set aside time to have an in-depth conversation with a qualified agent abut liability insurance vs property insurance before you commit to a certain company. Online quotes are a great way to get started and estimate your expenses.
Liability Insurance vs Property Insurance - The Bottom Line
We hope this article on liability insurance vs property insurance has been informative. So if you are asked what the difference between these two types insurance is - now you can answer.