What is property insurance?
Property insurance is a separate branch of business insurance in the legal system. It may refer to property, i.e. ownership and other property rights, as well as civil liability (OC). The issues related to property insurance are legally regulated by articles 821-828 of the Civil Code.
Property insurance is designed to financially compensate for damage caused by certain events. The subject is a natural or legal person, while the object is the property rights and obligations of the insured person. The sum insured, or the maximum amount of compensation after a loss, is determined based on the value of property. Property insurance is usually bought for 1 year, although it is not regulated by top-down rules and depends on the agreement between the insurance company and the insured.c
What does the property insurance cover?
Property insurance is a separate section of business insurance and is clearly separated from personal insurance. Among the property insurance policies, we distinguish tourist, motor (OC and AC) and housing ones. The subject of such insurance may be a trip, car or real estate.
In the case of property insurance, it is worth noting that not all apartments and houses can be covered. The problem with the insurance, or more precisely with the payment of the compensation, may occur when:
the real estate is not permanently inhabited,
It is built of materials highly susceptible to fire,
the property is destined for demolition or is unfit for habitation.
The home insurance policy may protect not only buildings and dwelling premises, but also belonging premises (cellar or garage), buildings and structures located on the property (shed, summer house, outbuilding, etc.), and even outside the property, such as a summer house or a gravestone. Companies also insure construction investments, i.e. houses under construction.
What does property insurance consist of?
A home insurance policy can have different forms and can be tailored to individual needs, for example, by choosing appropriate add-ons and setting insurance amounts. Property insurance consists of several elements.
The subject of insurance – the policy may cover the real estate itself (walls), fixed elements and movables, as well as buildings and buildings located on the property. It is also possible to include, among other things, holiday home, pets (they are classified as movables) and extras for tenants (third party liability in private life or personal accident insurance).
Scope of protection – insurance may protect us against force majeure events (fire, flood, inundation, lightning, etc.) and against the activities of third parties (e.g. burglary, vandalism, graffiti).
Sums insured – are determined individually for walls, fixed elements, movables, and third party liability in private life. This is the upper limit of compensation we can obtain.
Exclusions of liability – situations in which the insurer will not pay us compensation. They are always described in detail in the general terms and conditions of the contract.
Liability limits – it may be deductible franchise (the policy does not cover damages below e.g. 100 PLN) or limitations relating to extensions, such as home assistance (e.g. the maximum number of specialist interventions per year).
What are the types of property insurance?
We can divide property insurance into private and company insurance. In the first case, we are talking about a classic home insurance policy, which may financially secure the property (walls and fixed elements) and its equipment (movables), and may also include third party liability in private life.
Property insurance for a company may cover real estate, a company car and movable property, which in this case are:
production machinery and equipment or equipment used to provide services;
so called current assets, i.e. production stock, cash, receivables or material stock, among others
personal belongings of the company’s employees.
Property insurance for a company may also include third party liability, which includes:
tort liability – applies to damages resulting from the ownership and use of property;
contractual third party liability – refers to damage resulting from failure to perform contracts or the improper implementation of contractual terms;
Civil liability relating to marketing of a product – for damage resulting from faulty marketing of goods.
Compensation under the property insurance policy – remember about it
The role of the property insurance is to compensate financially for the losses incurred. We will never gain thanks to it more than we lost. For example, if we insure a house worth 400 000 PLN for 500 000 PLN and it completely burns down, the insurance company will pay us only 400 000 PLN. Such a situation is called overinsurance and it is unfavorable because you pay too much premium.
