Property insurance contract - reliable protection against unforeseen situations

Although most often the personal property insurance contract is under the pressure of banks that require a policy to be used if they wish to use real estate or in cars as collateral when accessing lending programs, such a document becomes a reliable protection against various unforeseen situations. In this case, when the property is destroyed by third parties or because of force majeure circumstances, a citizen can recover his value by shifting the damage to the insurance company.

Insurance liability :

By signing the property insurance contract, the policyholder can receive a payment in the event that the property and all items in it are destroyed as a result of an explosion or fire, flooding with water or other natural disasters. However, the insurance company usually reimburses only direct damages for the amount originally stipulated in the policy, but even after payment of compensation the insurer continues to bear responsibility for the insured object and in the future until the contract expires.

Varieties :

Currently, the insurance contract can be concluded both with citizens and with legal entities on a voluntary basis. The company can insure against the risk of damage or death such property objects as air, water or land transport, as well as the goods transported with it. Citizens are offered to arrange policies that protect them from damage or loss of garden houses and cottages, country houses and apartments, various vehicles and household goods.

Double insurance :

Often, citizens or company management seeks to conclude a property insurance contract with several insurers to increase the amount of compensation when the insured event occurs at times. However, if the percentage of payments from various companies exceeds the value of the insured property, the insured should not expect to receive huge compensation.

So, the current legislation provides that in the case of "double" insurance, the person making out the policy is required to inform the company of all contracts relating to this property that were concluded in other insurance companies. In situations where the policyholder has not informed his agent in writing that the property is already insured in other companies, all policies may lose legal validity.

Insurance coverage :

Each insurance contract provides for the size of the insurance coverage based on the list of possible risks specified in the policy being drawn up. The list of insurance cases is compiled on the basis of two methods, including an exclusion method, where the contract specifies cases in which compensation is not paid. The method of inclusion, on the contrary, provides for the payment of compensation only in the event of occurrence of one of the insurance events listed in the text of the contract, and in other situations the company does not assume responsibility for the loss of the client's property.

As a rule, the policies specify the amount of the deductible - a part of the damage that will not be paid to the client. Thus, a conditional franchise provides that, upon the occurrence of damage to property, the policyholder will receive compensation if the amount of damage exceeds the minimum threshold specified in the policy. And in an unconditional franchise, the unpaid part is prescribed in advance in a percentage of the contract entered into.

Compensation for damage :

Each insurance contract should 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 amount specified in the policy.