As a property owner, you have invested years of toiling and sweating into building and maintaining your valuable asset. You will surely not like it if some form of damage or loss occurs to your property, and it is here that the option of finding a suitable insurance policy comes into play. Fire insurance and property insurance both keep your insured property covered in case of any loss or damage. However, they differ from one another and serve different purposes.
What is Fire Insurance?
Fire insurance covers all the damages and losses caused by an unexpected fire accident. It can either be bought as a separate policy, may come combined as fire and burglary insurance, or may be issued as part of the property insurance policy. A fire insurance policy provides coverage only against the losses and damages that result from a fire outbreak. It can be purchased on residential and commercially used properties that are at risk from fire-related accidents.
Benefits of Fire Insurance
A fire insurance policy includes an exhaustive list of inclusions: cover against fire outbreaks caused by many unexpected events, such as faulty electricity fixtures, explosions, man-made fires, faulty equipment, and so on. Fire insurance serves the needs of small and big businessmen alike; it provides complete peace of mind because one gets immediate financial support and help in case of a fire tragedy.
What is Property Insurance?
Property insurance is one of the most sought-after categories of insurance today. It covers the insured property against a whole host of risks, including damages and loss caused by natural disasters, theft, fire, man-made hazards, and other specified perils. It covers both the building and its contents. Property insurance can be sought by any property owner, irrespective of whether the property is used for residential or commercial purposes.
Benefits of Property Insurance
A property insurance policy provides 360-degree coverage for the insured premises, covering it against all probable perils like earthquakes, floods, fires, thefts, and so on. It also covers building and contents, including personal belongings, electronic equipment, furniture, and machinery.
Difference Between Fire and Property Insurance
Here are the major differences between fire and property insurance —
Fire insurance covers only fire-related accidents, while property insurance covers a wide array of possible risks that may befall the insured property and its contents through unfortunate events.
The premium rates in the case of property insurance are higher compared to fire insurance.
Fire insurance is not flexible; it covers only the loss arising from fire accidents, but property insurance is highly flexible as a wider scope of coverage can be provided under one policy.
Fire insurance is ideal for home and business owners whose risk of fire tragedy is high, while property insurance becomes ideal for the owners of large residential and commercial properties who seek comprehensive cover.
Fire insurance is suitable for residential and commercial areas near a forest, small shops, and factories, while property insurance could be ideal for hospitals, offices, shopping malls, bungalows, etc.
- Third-party Liability Coverage
Fire insurance may or may not provide liability coverage, but most property insurance policies do.
The choice between property insurance and fire insurance has to be absolutely based on the risk to which your property or your business is vulnerable.
Conclusion
Getting the right insurance for your property is vital. You can safeguard all your valuable assets against any unforeseen event, like natural calamities, fire hazards, etc., by investing in the right type of property or fire insurance. The financial losses you incur due to the damage caused to your property are covered under fire insurance and property insurance, respectively. Understanding the differences between property insurance and fire insurance will help you address your insurance needs better.