Real Property Insurance, what is it?
What exactly is real property? Well, real property is often simply referred to as real estate. It can be defined as land and property that is affixed to land, such as homes, pools, buildings, bridges, roads, trees, crops, light fixtures, etc. It differs from personal property, which is the property that is not attached to land, such as furniture, appliances, clothing, etc.
Real property falls into two classifications: residential and commercial. What does real property insurance cover? It provides coverage for perils (cause of a possible loss) that cause damage to property.
Common Real Property Perils
- Windstorms and hail
- Fire and smoke
- Lightning strikes
- Damage caused by aircraft, car, or vehicles
- Riot
- Vandalism or malicious mischief
- Explosion
- Water damage
- Falling objects
- Weight of ice or snow
Perils Not Covered Under Real Property Insurance
Although real property insurance covers many different perils, it does not cover all of them. If you live in areas where the following additional perils are common, it is recommended that you consider purchasing coverage for them as well.
- Earthquake
- Flood
- Landslide
- Mudslide
- Sinkholes
Insurance companies strongly encourage real property owners to carry liability insurance (covers property owners against lawsuits for things covered under the policy). That is because liability insurance is not automatically included in many real property insurance policies. Liability insurance protects the purchaser (the “insured”) from lawsuits and similar claims that are within the coverage limits of the insurance policy.
Common Real Property Liability Coverage Includes
- Bodily injury or property damage – arising out of business operations or product liability.
- Reputational harm – such as libel, slander, false arrest, malicious prosecution, wrongful eviction, and violation to the right of privacy.
- Damage to property – such as business property that has been rented to you.
- Medical payments – for persons injured on your property.
- Advertising errors – including infringement on copyrights when advertising.
Whether you plan on buying real property insurance, personal property insurance, liability insurance, or a combination of the three, it is important that you understand the coverage that you have before a loss occurs. Before you suffer a loss, talk with your insurance company and make sure that you are adequately insured for all possible losses. Don’t assume that you can get away with buying “basic insurance coverage” and take your chances that a serious loss won’t occur. You never know when and what type of loss you will be exposed to.
The Smythe Law Group, Inc. has extensive experience in property, casualty, and liability claims. If you or someone you know has suffered a loss to real property, personal property, or have a liability claim pending, give us a call.