Property damage, in the simplest terms, is damage to anything that is owned; this could refer to properties that are tangible or intangible, residential or commercial, as well as private and public assets.
Types of Property Damage
• Fire Damage- Damage to property that is brought about by fire, whether intentional or unintentional.
• Water Damage- Damage to property as a result of varying factors such as water leakage and flooding.
• Flood Damage- Damage to property that is caused by rain (natural phenomena)
• Earthquake Damage- Damage to property as a result of an earthquake.
• Intentional Damage- Damage to property often triggered by malicious intent.
Coverage for Property Damage Insurance
In order to cushion the tremendous effects of any type of property damage on the owner, insurance is necessary. Although oftentimes perceived as an unnecessary expense, insurance coverage is in fact a necessity and its benefits can be more felt in the aftermath of any property damage.
Below is a list of insurance coverage.
1. HO-1 Coverage. This covers the most basic types of damage including those caused by natural phenomena, such as lightning strikes and fire.
2. HO-2 Coverage. This covers a wide variety of damages including intentional damages (destruction brought about by automobile and plane crashes, vandalism, and other malicious damage types), as well as hail, explosions, and storms.
3. HO-3 Coverage. The most popular type of coverage for homeowners, this is otherwise referred to as special coverage insurance because it protects owners against all types of property damage except for certain exclusions stipulated in the policy.
4. HO-4 Coverage. This is called the renter’s insurance coverage because it caters mostly to rented properties. Such coverage includes liability protection, medical costs, and even cost of living expenses if the damage would go to this extent.
5. HO-6 Coverage. This is also referred to as condominium insurance coverage because it is designed specifically for condo unit owners, to protect their units as well as any associated liabilities.
6. HO-8 Coverage. This insurance coverage is designed for old homes. Usually, owners of old homes (that are newly acquired) find it difficult to avail of regular insurance because older homes are considered high risk. As such, they need to acquire a special type of insurance (HO-8) which will pay for current standard construction materials in the event that the property will get damaged.
The premiums for these types of coverage would of course vary but the general idea is that the basic coverage has the lowest premium rates. However, one must not forget that “cheap” is not necessarily the best choice.