Home Insurance vs Property Insurance: Which One Should You Get?

By: Gabriel Magan
property insurance

Being a homeowner is a significant milestone in the adulting life, but with it comes the responsibility of safeguarding your hard-earned money. Planning to purchase a house and lot for sale in Dasmarinas Cavite includes the responsibility of considering before this purchase the insurance for the home. For fellow home enthusiasts, ever wondered what the buzz is about house insurance in the Philippines?

Understanding the Basics of Home Insurance

What’s the deal with house insurance? It is coverage for any losses or damages to a person’s beloved home and its contents. At its core, homeowners insurance is designed to provide financial protection in the event of damage caused by various perils. From natural disasters to accidental mishaps, having a robust insurance policy is essential for mitigating potential financial losses.

Here’s the scoop: as long as a policy owner keep those premium payments flowing like a well-mixed shake, the trusty home insurance provider swoops in to save the day when covered disasters strike. Think fire, floods, or even the rare crocodile attack (hey, we never know). Every policy has a limit, though – like a spending cap – determining how much backup one person got when the unexpected comes knocking.

Just like a Netflix or Spotify subscription, home insurance coverage is like a yearly subscription to peace of mind. And the best part? It’s as easy as pie to renew with the insurance squad. They’ve got your back, year in and year out.

Who’s Eligible for this?

Whether you’re chilling in a single detached home, kicking it in a townhouse, or enjoying the condo life in Makati, you’re in the club. Even apartments and other dwelling units make the cut. Because, hey, we all deserve a shield against the uncertainties of life, right?

How to Compare Home Insurance Companies?

In terms of cryptocurrency investing, the widely used term is DYOR, or “do your own research,” and the same principle applies when assessing home insurance options. You can also explore alternative methods for gathering information. Conducting thorough research, seeking recommendations from trusted sources, and evaluating customer reviews are effective approaches. But, here is the comparison and commonalities found between different insurance providers in the Philippines (Prudential Guarantee Property Insurance, FPG Home Insurance, BPI MS Home Care Advantage, Malayan Insurance Home Protect)

Basic Perils Coverage:

  • Fire and lightning are common covered perils in all four providers.
  • Other common perils include typhoons, floods, earthquakes, smoke, riots, strikes, malicious damage, vehicular impact, and falling aircraft.
  • All providers offer personal liability insurance
  • Alternative accommodation coverage
  • Accidental breakage of fixed glass is a shared benefit
  • Replacement of locks and keys
  • Architect and surveyor’s fees

Family Accident and Hospitalization Insurance:

  • Medical reimbursement
  • Hospital cash allowance
  • Surgical and ICU benefit
  • Accidental death, disablement, dismemberment
  • Burial expense benefit

Household Employee Insurance:

  • Personal accident coverage for household employees
  • Hospital cash allowance for household employees

Additional Coverage and Extensions:

  • Broad water damage
  • Coverage against smoke damage, explosion, vehicular impact, falling aircraft
  • Debris removal expense
  • Alternative accommodation/loss of rent
  • Personal liability coverage

Actual Cash Value and Replacement Cost

When it comes to homeowners insurance policies, understanding terms like actual cash value and replacement cost is crucial. Homeowners often face the choice between these two options when insuring their property.

Person Giving Money To hand

Actual cash value considers the depreciated value of items, providing coverage for their current worth. On the other hand, replacement cost covers the expense of replacing damaged or lost items with new equivalents, without factoring in depreciation.

If your whole house is destroyed, what does it cost to rebuild it? Well, it’s not the amount it costs to buy it, which is why you need to have enough insurance for what’s called replacement cost.

This can be as much as twice the amount your house would be worth at the market. So don’t think that a 2,000,000 peso policy for example is enough to cover a 2,000,000 peso house. Your insurance company will have the formula to calculate how much it costs to rebuild a house of your size in your area based on a per-square-foot number. It’s important to have a policy that covers replacement costs in case your house has to be rebuilt.

Choosing between actual cash value and replacement cost in your home insurance can seriously affect how much you get if something goes wrong. You need to think about the good and bad sides of each to make sure your insurance does the job of keeping your home and stuff safe.

Insurance for Property

Property insurance typically provides coverage for the physical structure and its belongings in the event of damage or theft resulting from incidents such as burglary, fires, or natural disasters. When a claim is filed with the insurance company for damage or losses to the property or its contents, the property owner(s) will receive reimbursement of a same amount as the actual value of the affected or stolen item, or the cost required for repairs or replacement, up to a specified limit.

Moreover, property insurance may offer liability coverage for homeowners if a person other than the homeowner is injured within the insured premises.

Home insurance policy with keys and dollar money mortgage, loan or home insurance documents.

Property insurance is like an all-in-one package in the insurance world that covers your stuff—whether it’s your house, car, motorcycle, or personal belongings. It doesn’t matter if you live in a house in Laguna, an apartment in Bacoor, or a condo in Cavite; having property insurance is important.

Casualty Insurance

Now, casualty insurance is a bit different. It’s this other big term in insurance, but instead of protecting your things, it’s all about covering your back if you’re legally responsible for an accident. So, if you accidentally cause harm to someone or damage their stuff (hopefully not), casualty insurance has got you covered.

And it’s not just for individuals; businesses need casualty insurance too. Let’s say someone gets into an accident inside the store premises. If the business has a commercial general liability policy, they’re covered for situations like that.

So, property insurance is like a guardian for your possessions, while casualty insurance is your legal backup in case things go south.

Which One Should You Get?

If you own a house and want to protect both the home you live and your personal belongings, a comprehensive home insurance policy is the appropriate choice.

If you own various types of properties, such as commercial buildings or rental properties, you may need different types of property insurance policies tailored to each specific situation.

A young man in suit in his office showing an insurance policy and pointing with a pen where the policyholder must to sign.

It’s crucial to carefully review any insurance policy’s terms, conditions, and coverage limits before purchasing. Additionally, consulting with an insurance agent can help you understand your specific needs and find the right coverage. Ultimately, the choice between home insurance and property insurance depends on the type of property you own and the level of coverage you require.

Important Thing to Remember

When you start your search for homeowner’s insurance or property insurance, it’s important to assess your needs to determine the right amount of coverage. It can be tempting to choose a policy based on price alone, but you probably won’t get the right amount of protection using that method. Protecting your investment doesn’t mean breaking the bank. Get a range of quotes and know your options.

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