What Does Property Insurance Normally Cover?

Home insurance is designed to cover the loss of your house and personal belongings as a result of theft, fire and various other events. The degree of cover will vary from plan to plan but, in general terms, a policy will cover all or part of the cost involved when your home or belongings are destroyed, damaged or stolen.

We cannot list precisely what will be covered by your policy as this will depend on the insurance firm chosen and the conditions of your policy. Almost all plans will however give cover for some or all of the following events:

Fire
Vandalism
Smoke
Explosion
Hot water heater bursting
Unauthorized use of credit cards
Freezing of plumbing
Volcano
Flooding due to plumbing overflow
Theft, including check forgery and counterfeit currency
Windstorm
Riot
Lightning
Power surges
Falling objects
Ice, snow, or sleet weighing on vehicles
Hail
Heating system malfunction

There are a variety of different sorts of property insurance policy, generally called a 'form' and the most commonly available forms are:

The Dwelling Fire Form. This sort of house insurance plan provides cover for simply your dwelling and does not provide cover for your personal belongings. Furthermore, it does not give cover for your personal liability. As its name might suggest it only offers cover for limited events which ordinarily extend to smoke, fire, windstorm, hail, lightening, explosion, vehicles and civil unrest.

The Basic Form. This sort of property insurance extends your cover to take in the theft of your personal belongings and vandalism.

The Modified Coverage Form. The cover here is identical to that given under the basic form but this form of cover is applied to older properties for which rebuilding costs are higher than the market value of the property.

The Broad Form. The broad form of property insurance extends cover beyond that seen in the basic form so that it includes damage resulting from falling trees and other objects; damages resulting from the weight of ice, snow and sleet and the freezing, rupturing or sudden accidental overflow of a plumbing, heating, air-conditioning or fire sprinkler system or another household appliance.

The Special Form. The special form is the most commonly purchased form of house insurance and covers you against all hazards unless these are excluded specifically in the conditions of the policy. Perils which are usually excluded include flooding, earthquake, nuclear accident and war.

As well as the forms of house insurance listed above there is also the tenants form for renters and the condominium unit owners form for owners of condominium units. Further, owners of townhouses can purchase an individual policy or may be able to get cover under an association master policy. Finally, in the majority of states owners of mobile homes whose home possesses wheels and is not resting on a permanent foundation will be required to buy auto insurance instead of house insurance.