What is property insurance?

Property insurance offers protection to buildings and fixtures installed within those buildings. The insurance agreement for your property insurance should specifically define what property is protected - in addition to the buildings and installed fixtures, your insurance may also protect onsite materials and equipment, inventory and even personal property.

The agreement will also outline what types of damage to your property are covered - typically, this will include fire, explosions, smoke damage, terrorism, etc. It may also include protection against earthquakes and/or floods, although those are often separate insurance policies. At the time you are entering into your property insurance agreement, aside from making sure these things are all clearly defined, you will also need to work out how much coverage you are getting (you should generally insure your property for the total of its value) and whether the insurance covers the replacement cost of damaged property or the current and actual value of the property (which may be less than the replacement cost).