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Why You Need Property Insurance

Insurance is an arrangement you hope you don’t have to use, but if the need arises, it’s invaluable. No one prays for an accident, but ships capsize, cars crash, buildings catch fire, plans fail, business deals go wrong, houses collapse, and the list goes on. After these mishaps, what’s next?

The concept of insurance dates as far back as 2nd millennia BC, where it entails agreements of mutual aid. If a family’s house gets destroyed by fire, the neighbours are dedicated to help restore it.

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. A form of risk management primarily used to hedge against the risk of a contingent uncertain loss. -Wikipedia

When you pay your premium, a relatively small fee to an insurance company today, in exchange for a guarantee from the insurance company that it will bear the burden of a large but uncertain loss in the future. Types of insurance include Life insurance, home insurance, motor insurance, GIT, etc.

Property insurance is traced to the Great Fire of London, which in 1666 devoured more than 13,000 houses. Only then was it clear that property insurance was a matter of urgency rather than commitment.

After September 11, 2001, the insurers of the World Trade Center, including Chubb Corp. and Swiss Reinsurance Co. paid $4.55 billion to rebuild the property. Just imagine the building was not insured, imagine premium payment was skipped in 2001, the year it was hit. These examples clearly confirm the importance of property insurance in a world of uncertainties.

Some Benefits of Property Insurance

  1. Insuring your property restores you back to where you were in case of any disaster.
  2. Covers fire, theft, storm, flood etc.
  3. Timely recovery
  4. Financial protection

Choosing the Right Insurer

  1. Check their track record and be sure they have a good reputation
  2. Satisfactory claim settlement profile
  3. Reliable financials
  4. Easy Access

Safety and Security Tips

  1. Fix smoke detectors and test them once a month
  2. Always switch of electrical appliances after use, before going to bed and when going out
  3. Invest in fire extinguishers
  4. Trim trees close to doors and windows
  5. Service locks, screws, etc. regularly
  6. Fix burglar alarms

Mostly, homeowners insurance is not enforced but is a wise decision, just in case there is a disaster.

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