Although the most common contract for personal property insurance is under pressure from banks requiring a policy if you want to use real estate or in a car as collateral when applying for lending programs, such a document becomes reliable protection against various unforeseen situations. In this case, when property is destroyed by third parties or due to force majeure circumstances, a citizen can regain its value, transferring the damage to the insurance company.
Insurance liability :
By concluding a property insurance contract, the insurer can receive payment in the event that the property and all things in it are destroyed as a result of an explosion or fire, flood with water or other natural disasters. However, the insurance company usually compensates only direct damage for the amount that is initially stipulated in the policy, but even after payment of compensation, the insurer continues to be liable for the insured object and in the future, until the contract expires.
Varieties :
Currently, an insurance contract can be concluded both with citizens and with legal entities on a voluntary basis. The company may insure against the risk of damage or loss of property such as air, water or land transport, as well as goods transported with it. Citizens are invited to apply for policies that protect them from damage or loss of garden houses and cottages, country houses and apartments, various vehicles and household property.
Double insurance :
Often, citizens or company management seeks to conclude a property insurance agreement with several insurers in order to increase the amount of compensation at the occurrence of an insurance event at times. However, if the percentage of payments from various companies exceeds the value of the insured property, the policyholder should not expect to receive huge compensation.
So, the current legislation stipulates that in the case of "double" insurance, the policyholder is obliged to inform the company of all contracts relating to this property that were concluded in other insurance companies. In situations where the policyholder did not inform his agent in writing that the property was already insured by other companies, all policies may lose their legal force.
Insurance Coverage :
Each insurance contract provides for the amount of insurance coverage based on the list of possible risks specified in the policy being drawn up. The list of insured events is compiled on the basis of two methods, which include the method of exclusion, where the contract indicates cases in which compensation is not paid. The inclusion method, on the contrary, provides for the payment of compensation only in the event of the occurrence of one of the insurance events listed in the text of the contract, and in other situations the company does not take responsibility for the loss of property by the client.
As a rule, the policies indicate the size of the deductible - part of the damage that the client will not be paid. So, the conditional deductible stipulates that upon damage to property, the policyholder will receive compensation if the amount of damage exceeds the minimum threshold specified in the policy. And in the unconditional franchise, the unpaid part is pre-assigned in percentage terms in the contract being concluded.
Indemnification :
Each insurance contract must include a description of the procedure for compensation for damage, and if the property is not insured for its full value, the policyholder will be paid only a certain percentage specified in the policy. In situations where the contracts provide for full compensation for damage, payments are made within the specified amount specified in the policy.