Property Insurance

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DEFINITION of 'Property Insurance'

A policy that provides financial reimbursement to the owner or renter of a structure and its contents, in the event of damage or theft. Property insurance can include homeowners insurance, renters insurance, flood insurance and earthquake insurance. Personal property is generally covered by a homeowners or renters policy, unless it is of particularly high value, in which case it can usually be covered by purchasing an addition to the policy called a "rider". If a claim is filed, the property insurance policy will either reimburse the policyholder for the actual value of the damage, or the replacement cost to remedy the damage.

INVESTOPEDIA EXPLAINS 'Property Insurance'

Perils typically covered by property insurance include damage caused by fire, smoke, wind, hail, weight of ice and snow, lightning, theft and more. Property insurance also provides liability coverage in case someone other than the property owner or renter is injured while on the property, and decides to sue.


Property insurance policies normally do not cover water damage caused by floods, tsunamis, drain backups, sewer backups, groundwater seepage, standing water and many other water sources. They also may not cover mold, earthquakes, nuclear events or acts of war, such as terrorism and insurrections.

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