Editing Property insurance

{{Short description|Insurance that protects against most risks to property}}
[[File:Tornado Damage, Illinois 2.JPG|right|thumb|This [[tornado]] damage to an [[Illinois]] home would be covered as a typical named peril.]]
'''Property insurance''' provides protection against most risks to [[property]], such as fire, theft and some weather damage. This includes specialized forms of [[insurance]] such as fire insurance, [[flood insurance]], [[earthquake insurance]], [[home insurance]], or [[boiler insurance]]. Property is [[Insurance|insured]] in two main ways—open perils and named perils.

Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from [[earthquake]]s, [[flood]]s, [[Nuclear and radiation accidents|nuclear incident]]s, acts of [[terrorism]], and war.  Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, [[lightning]], explosion, [[Cyberattack|cyber-attack]], and theft.

==History==
{{see also|History of insurance}}
[[File:Insurance contract.jpg|thumb|right|An 18th-century fire insurance contract]]
Property insurance can be traced to the [[Great Fire of London]], which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in [[Christopher Wren|Sir Christopher Wren]]'s inclusion of a site for 'the Insurance Office' in his new plan for London in 1667".<ref>Dickson (1960): 4</ref> A number of attempted fire insurance schemes came to nothing, but in 1681, [[Economics|economist]] [[Nicholas Barbon]] and eleven associates established the first fire insurance company, the "Insurance Office for Houses", at the back of the [[Royal Exchange, London|Royal Exchange]] to insure brick and frame homes. Initially, 5,000 homes were insured by Barbon's Insurance Office.<ref>Dickson (1960): 7</ref>

In the wake of this first successful venture, many similar companies were founded in the following decades. Initially, each company employed its own [[fire department]] to prevent and minimize the damage from conflagrations on properties insured by them. They also began to issue '[[fire insurance mark]]s' to their customers; these would be displayed prominently above the main door to the property in order to aid positive identification. One such notable company was the [[Hand in Hand Fire & Life Insurance Society]], founded in 1696 at Tom's Coffee House in [[St Martin's Lane]] in [[London]].<ref>{{cite web|title=Hand in Hand Fire & Life Insurance Society|url=http://www.aviva.com/about-us/heritage/companies/hand-in-hand-fire-and-life/|website=Aviva|access-date=2009-06-26|archive-url=https://web.archive.org/web/20101204135549/http://www.aviva.com/about-us/heritage/companies/hand-in-hand-fire-and-life/|archive-date=2010-12-04|url-status=dead}}</ref>

The first property insurance company still extant was founded in 1710 as the Sun Fire Office and is now, through many mergers and acquisitions, the [[RSA Insurance Group]].<ref>{{cite web|title=RSA Insurance Group History|url=http://www.rsagroup.com/rsa/pages/aboutus/history|url-status=dead|archive-url=https://web.archive.org/web/20110902071509/http://www.rsagroup.com/rsa/pages/aboutus/history|archive-date=2011-09-02}}</ref>

In [[Colonial America]], [[Benjamin Franklin]] helped to popularize and make standard the practice of insurance, particularly Property insurance to spread the risk of loss from fire, in the form of [[Perpetual Insurance|perpetual insurance]]. In 1752, he founded the [[Philadelphia Contributionship for the Insurance of Houses from Loss by Fire]]. Franklin's company refused to insure certain buildings, such as wooden houses, where the risk of fire was too great.

==Types of coverage==
There are three types of insurance coverage. Replacement cost coverage pays the cost of repairing or replacing the property with like kind & quality regardless of depreciation or appreciation. Premiums for this type of coverage are based on replacement cost values, and not based on actual cash value.
<ref>{{cite news|title=The Replacement Cost Claim|url=http://adjustersinternational.com/publications/adjusting-today/sometimes-its-what-the-policy-doesnt-say/6/|agency=Adjusting Today|issue=3005|publisher=Adjusters International|date=2011}}</ref> [[Actual cash value]] coverage provides for replacement cost minus [[depreciation]].<ref>{{cite web|title=Commercial Property Insurance: How To Protect Your Business|url=https://strongerinsight.com/commercial-property-insurance-how-to-protect/|publisher=Stronger Insight|date=2022}}</ref> 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. When obtaining an insurance policy, the limit is the maximum amount of benefit the insurance company will pay for a given situation or occurrence. Limits also include the ages below or above what an insurance company will not issue a new policy or continue a policy.<ref>{{cite web|title=A Consumer's Insurance Glossary|url=http://www.insurance.wa.gov/your-insurance/tips/glossary-insurance-terms/|website=Office of the Insurance Commissioner - Washington State}}</ref>

This amount will need to fluctuate if the cost to replace homes in a neighborhood is rising; the amount needs to be in step with the actual reconstruction value of the home. In case of a fire, household content replacement is tabulated as a percentage of the value of the home. In case of high-value items, the insurance company may ask to specifically cover these items separate from the other household contents. One last coverage option is to have alternative living arrangements included in a policy. If property damage caused by a covered loss prevents a person from living in their home, policies can pay the expenses of alternate living arrangements (e.g., hotels and restaurant costs) for a specified period of time to compensate for the "loss of use" of the home until the owners can return. The additional living expenses limit can vary, but is typically set at up to 20% of the dwelling coverage limit. Owners need to talk with their insurance company for advice about appropriate coverage and determine what type of limit may be appropriate.<ref>{{cite web|title=A Massachusetts Guide to Insurance for Your Home and Ways to Help Reduce Your Insurance Premiums|url=http://www.mass.gov/ocabr/docs/doi/consumer/homeowners-guide.pdf|website=The Official Website of the Commonwealth of Massachusetts}}</ref>

==US Property Insurance Claims==

===World Trade Center case===
[[Image:UA Flight 175 hits WTC south tower 9-11.jpeg|thumb|right|Attack on the World Trade Center]]
Following the [[September&nbsp;11 attacks]], a jury deliberated insurance payouts for the destruction of the [[World Trade Center (1973–2001)|World Trade Center]].  Leaseholder [[Larry A. Silverstein]] sought more than $7&nbsp;billion in insurance money; he argued two attacks had occurred at the WTC. Its insurers—including Chubb Corp. and Swiss Reinsurance Co.—claimed the "coordinated" attack counted as a single event. In December 2004 the [[federal jury]] arrived at a compromise decision.<ref>{{cite news|last1=Levine|first1=Greg|title=Silverstein: WTC Leaseholder May Collect Up To $4.6B|url=https://www.forbes.com/2004/12/06/1206autofacescan06.html|work=Forbes}}</ref>

In May 2007 New York Governor [[Eliot Spitzer]] announced more than $4.5&nbsp;billion would be made available to rebuild the {{convert|16|acre|m2|adj=on}} WTC complex as part of a major insurance claims settlement.<ref>{{cite news|last1=Bagli|first1=Charles V.|title=Insurers Agree to Pay Billions at Ground Zero|url=https://www.nytimes.com/2007/05/24/nyregion/24insure.html?ei=5124&en=2e2ed8e5e6afab5f&ex=1337745600&partner=permalink&exprod=permalink&pagewanted=print&_r=0|work=The New York Times|date=24 May 2007}}</ref>

===Post-Hurricane Katrina property insurance claims===
[[Image:FEMA - 14947 - Photograph by Jocelyn Augustino taken on 08-30-2005 in Louisiana.jpg|thumb|right|[[New Orleans]] in the aftermath of [[Hurricane Katrina]]]]
In the wake of [[Hurricane Katrina]], several thousand [[Owner-occupier|homeowner]]s filed lawsuits against their insurance companies accusing them of bad faith and failing to properly and promptly adjust their claims.<ref>{{cite news|title=First Hurricane Katrina Homeowner's Insurance Lawsuit Begins|url=https://www.foxnews.com/story/first-hurricane-katrina-homeowners-insurance-lawsuit-begins/|publisher=Fox News|date=11 July 2006}}</ref>

===Florida Consumer Choice Act===
On 24 June 2009, Florida Governor [[Charlie Crist]] vetoed the Consumer Choice Act (H.B.&nbsp;1171). The [[Bill (proposed law)|bill]] would have trumped state regulation, and allowed Florida's biggest insurance companies to establish their own rates.<ref>{{cite news|last1=Colavecchio|first1=Shannon|title=Crist rejects bill that aimed to lure property insurers to Florida|url=http://www.tampabay.com/news/politics/gubernatorial/crist-rejects-bill-that-aimed-to-lure-property-insurers-to-florida/1013056|work=Tampa Bay Times|date=24 June 2009|access-date=7 March 2016|archive-url=https://web.archive.org/web/20160307111156/http://www.tampabay.com/news/politics/gubernatorial/crist-rejects-bill-that-aimed-to-lure-property-insurers-to-florida/1013056|archive-date=7 March 2016|url-status=dead|df=dmy-all}}</ref>

Remarking upon State Farm's pullout from Florida, [[Theodore A. “Ted” Corless|Ted Corless]], a property insurance attorney who has represented large insurance carriers like [[Nationwide Mutual Insurance Company|Nationwide]], noted "that homeowners are really going to have to look out for themselves".<ref name=corless>{{cite news|title=Cancellation Clock Ticks For State Farm Customers|url=http://www.wesh.com/Cancellation-Clock-Ticks-For-State-Farm-Customers/-/11788876/13170000/-/view/print/-/ayg6b0z/-/index.html|access-date=28 September 2012|newspaper=WESH.com|date=7 October 2009|archive-url=https://web.archive.org/web/20131224115501/http://www.wesh.com/Cancellation-Clock-Ticks-For-State-Farm-Customers/-/11788876/13170000/-/view/print/-/ayg6b0z/-/index.html|archive-date=24 December 2013|url-status=dead|df=dmy-all}}</ref> Five days after Crist vetoed the Consumer Choice Act, Corless defended property insurance [[deregulation]] by pointing out that "if the [[Blue chip (stock market)|blue-chip]] insurance companies wanted to price themselves out of the market", then they would go out of business. He accused Crist of making choices on behalf of consumers, not protecting their right to choose. In 2006 the average Florida annual insurance premium was $1,386 for a homeowner, one of the highest in the country.<ref>{{cite web|author=Insure.com |url=http://www.insure.com/articles/homeinsurance/average-home-premiums.html |title=How do your home insurance rates compare with others? |publisher=Insure.com |date=12 March 2009 |access-date=7 October 2011}}</ref>

In May 2022, Florida lawmakers have signed off on quick fixes to the state's property insurance crisis but critics say the plan pays little attention to the growing threat of climate change.<ref>{{cite web |title=Florida Lawmakers Miss Climate Change in Fixes to Property-Insurance Crisis |url=https://www.sunshineslate.com/business/environment/florida-lawmakers-miss-climate-change-in-fixes-to-property-insurance-crisis/ |publisher=Sunshine Slate |access-date=6 June 2022}}</ref> [[Ron DeSantis|Governor Ron DeSantis]] signed bipartisan legislation implementing the most significant and comprehensive property insurance reforms Florida has seen in decades to provide short- and long-term relief to Floridians to combat skyrocketing insurance costs.<ref>{{cite web |title=Governor Ron DeSantis Signs Bipartisan Property Insurance and Condominium Safety Reforms |url=https://www.flgov.com/2022/05/26/governor-ron-desantis-signs-bipartisan-property-insurance-and-condominium-safety-reforms/ |publisher=Governor Ron DeSantis Website}}</ref>

==Fire insurance in India==

Fire insurance business in [[India]] is governed by the All India Fire Tariff that lays down the terms of coverage, the premium rates and the conditions of the fire policy. The fire insurance policy has been renamed as "Standard Fire and Special Perils Policy".

===Standard Fire and Special Perils Policy (SFSP)===
The Standard Fire and Special Perils Policy (SFSP)<ref>{{cite web|title=Standard Fire and Special Perils Policy|url=https://www.probusinsurance.com/property-insurance/standard-fire-and-special-perils/|website=Probus Insurance - Mumbai India}}</ref> is a kind of traditional insurance product that is specially designed to protect your property and its articles from the unforeseen unfortunate accidents caused due to fire and the allied perils. With multiple extensions, this policy not only keeps your property secure but also lessens the extent of the loss or damage that you may suffer causing a huge financial burden, and thus, it provides you relief from such anxiety. The risks covered are as follows:

*Dwellings, offices, shops, hospitals:
*Industrial, manufacturing risks
*Utilities located outside industrial/manufacturing risks
*Machinery and accessories
*Storage risks outside the compound of industrial risks
*Tank farms/gas holders located outside the compound of industrial risks

===Perils covered===
The following causes of loss are covered:

{{colbegin}}
*Fire
*Lightning
*Explosion, implosion
*Aircraft damage
*Riot, strike
*Terrorism
*Storm, cyclone, typhoon, tempest, hurricane, tornado, flood & inundation. 
*Impact damage
*Malicious damage
*Subsidence, landslide
*Bursting or overflowing of tanks
*Missile testing operations
*Bush fire<ref>As per tariff wordings adopted by all insurers</ref>
{{colend}}

===Exclusions===
The following are excluded from insurance coverage:
*Loss or damage caused by war, civil war, and kindred perils
*Loss or damage caused by nuclear activity
*Loss or damage to the stocks in cold storage caused by change in temperature
*Loss or damage due to over-running of electric and/or electronic machines

'''Claims'''
In the event of a fire loss covered under the fire insurance policy, the insured shall immediately give notice thereof to the insurance company. Within 15&nbsp;days of the occurrence of such loss the insured should submit a claim in writing giving the details of damages and their estimated values. Details of other insurances on the same property should also be declared.

==See also==
*[[Builder's risk insurance]]
* {{slink|Financial risk management#Insurance}}
*[[Home insurance]]
*[[Insurable interest]]
*[[Owner-controlled insurance program]]
*[[Renters insurance]]
*[[Vehicle insurance]]

'''Misc:'''
*Hamburger Feuerkasse, world's oldest fire insurer.

==References==
{{Reflist}}

==External links==
*{{Commons category-inline}}
*[http://eh.net/?s=fire+insurance Fire insurance] (EH.Net Encyclopedia of Economic History)

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[[Category:Property insurance| ]]
[[Category:Types of insurance]]