Importance of Property Insurance in America By: Binny I. Dawson
Importance of Property Insurance in America
By: Binny I. Dawson
2Objectives of this program
Learn the definition of Property Insurance
Learn the importance of Property insurance
Learn the different types of coverage
Have fun while you learn
3Meet Ned Flanders… Hi! I’m Ned Flanders from Newcastle, Oklahoma
I live here with my wife and kids
Like most people here I bought a house on mortgage
Our neighborhood isn’t very safe, so I decided to purchase a property insurance which covers a few natural disasters too
We’re prone to tornadoes
4Meet Cletus Spuckler… Howdy! My name is Cletus Spuckler!
I live next door to Ned, and live here with my family
I built a house last year and Ned has been asking me to take a property insurance
I don’t see the need to spend my hard-earned money on something that may or may not happen
5Disaster strikes Newcastle, Oklahoma:Category F5 Tornado rips their houses apart
† Ned, though depressed, remembers that Tornadoes were listed as a named peril in his insurance policy
† His insurance company paid the replacement cost to rebuild the house!!
Both lost their houses that day
† Cletus and his family were now homeless, they had put in all their money on the house and had no savings
† They had to move to a homeless shelter since they couldn’t rebuild the house. He regretted that he didn’t listen to Ned earlier.
6The Whole community helped Cletus rebuild his house
Cletus went to Ned to learn about property insurance and signed up for a policy
7What is Property Insurance?1. Property insurance provides protection
against most risks to property, such as fire, theft and some weather damage.
2. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance.
3. Property is insured in two main ways—open perils and named perils.
8Types of CoverageHow does it help us?
There are the three types of insurance coverage
1. Replacement cost coverage pays the cost of repairing or replacing your property with like kind & quality regardless of depreciation or appreciation
2. Actual cash value coverage provides for replacement cost minus depreciation
3. Extended replacement cost will pay over the coverage limit if the costs for construction have increased. This generally will not exceed 25% of the limit.
9Protect your property today!
Content Source: Wikipedia