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