When the unexpected happens, you want to make sure your property is protected.
Property insurance is intended to cover the cost of replacing lost or damaged property from a variety of covered events. If your home is destroyed in a fire or if your business inventory is stolen, property insurance can reimburse you for the cost of your items. Having adequate property insurance can be the difference between a minor business interruption or personal inconvenience and a major financial loss.
Personal Property Insurance
Personal property insurance is an important part of your existing home or rental insurance policy. It protects your belongings against covered damages, loss, or theft.
Think of all the valuable items in your home—how much would it cost to replace them all? Personal property insurance helps cover that cost.
What Does Personal Property Insurance Cover?
If any of these belongings are destroyed, personal property insurance can help replace them:
- Household appliances
- Electronics (computers, cell phones, tablets, laptops, televisions, entertainment systems, etc.)
- Art and décor
- Bicycles
- Clothing, shoes, and accessories
- Sport equipment
- Kitchen gadgets and dishes
- Books
- Indoor plants
There are some items that personal property insurance policies do not cover, such as pets, motor vehicles, and the property of tenants or boarders.
For the most part, personal property insurance policies cover damage from these events:
- Fire, lightning, or explosions
- Theft
- Vandalism
- Aircraft or vehicle damage
- Falling objects
- Weight of snow, ice, or sleet
- Power surges
- Freezing
- Smoke
- Windstorms or hail
Some policies cover additional risks. And, for even further coverage, all risk property insurance policies cover property from damage caused by anything that isn’t specifically excluded in writing.
Events that are typically excluded from personal property insurance coverage include the following:
- Neglect
- Acts of war or nuclear hazards
- Intentional damage to your own property
- Floods
- Earthquakes
You can often purchase additional coverage for disasters such as floods or earthquakes.
How Much Does Personal Property Insurance Cost?
How much personal property insurance you should acquire depends on the value of your personal belongings. For homeowners, the insurance company will often base the personal property coverage on a percentage of the dwelling coverage; on the other hand, renters can often choose their own property limit.
If you don’t know how much your property is worth, though, how will you know if you have enough personal property coverage? To find out how much coverage you need, take an inventory of the items in your home—especially the big-ticket ones like electronics, appliances, furniture, and jewelry. By evaluating what you have, you can better determine if you are covered.
Some high-value items like jewelry, firearms, furs, gold, coins, silverware, and electronics may need additional coverage. Many insurance companies offer extra personal property coverage for these belongings.
Commercial Property Insurance
Every business—large and small—needs commercial property insurance. Accidents that damage your inventory, equipment, or property can significantly disrupt your business operations. For the continued success and growth of your business, it’s important to protect your company’s physical assets.
What Does Commercial Property Insurance Cover?
In addition to the physical office you rent or own, commercial property insurance covers the cost of replacing a variety of items:
- Office equipment
- Furniture and fixtures (desks, chairs, appliances, supplies, etc.)
- Computers and other electronics
- Inventory
- Fences, trees, signs, landscaping, and other exterior features
- Important documents and data
Other items that support your daily business operations may also be covered.
Most commercial property insurance policies cover damage from unexpected events like fires, storms, explosions, burst pipes, vandalism, and theft. You may also be able to purchase additional coverage for damage caused by earthquakes and floods, depending on what policies your insurance company offers.
How Much Does Commercial Property Insurance Cost?
There are many factors that an insurance company considers when determining how much a business will pay for commercial property insurance. Other than the combined value of your business assets, insurers will likely ask these questions, among others, to establish a price range:
- What type of company is your business?
- What industry does your business operate in?
- How big is your company?
- Where is your office located?
- What is your company’s track record and loss history?
- What fire and theft protections are in place at your office?
- How was your building constructed?
These questions are all part of discovering the risk level of your company. The more your business is at risk of damage, the higher your commercial property insurance premiums will be.
Types of Property Insurance Coverage: Replacement Value vs. Actual Cash Value
You have two personal property coverage options that establish how your insurer will pay out when you make a claim. Items can be covered based on their replacement value or their actual cash value. It’s up to you to make a choice that works best for your property coverage needs.
Replacement Value
If you choose to insure your property at replacement value, the insurer will reimburse your lost or damaged items at the cost of a brand-new replacement. These policies have higher premiums, but if you what to protect a lot of high-value property, it could be worth the extra up-front expense.
Actual Cash Value
When property is insured at actual cost value (ACV), it means that the insurer will pay for the depreciated value of the items. ACV policies typically have lower premiums, but lost or damaged property will only be covered for what they are currently worth—which means you may need to pay additional money out-of-pocket in order to replace them.
Contact Melton McFadden for All Your Michigan Property Insurance Needs
At Melton McFadden, our experienced insurance professionals can help you develop a property insurance plan that protects your business, personal belongings, and peace of mind. We are ready to guide you through the process of identifying areas of risk, finding gaps in your current insurance plan, and creating a solution that works best for you and your property.
Whether you are looking to protect your business inventory against loss or secure additional property insurance for your home, we’re here for you every step of the way. Contact us today or request a free quote to get started.
