Property insurance is, simply put, insurance that covers damages or losses to your property and to people on your property. But there’s much more to it than that. It has a long and interesting history, and actually isn’t as cut-and-dried simple as our opening statement. Yes, your property insurance DOES financially reimburse you for loss or damage to your property – and to your guests and workers – but as you’ll see, there’s a bit more to it than that.

We owe the fact that property insurance even exists to the Great Fire of London in 1666. The Great Fire deserves the capitalization of its name because it devoured more than 13,000 homes. In its wake, even the famous architect who helped design and rebuild the city, Christopher Wren, saw the need for some sort of insurance to help those affected by an future disasters. In 1681, the first office of fire insurers was opened and 5,000 residents bought the first property insurance. Granted, it only insured against loss or damage by fire, but it was the start of an industry that now includes so much more.

There are essentially 3 types of property insurance. There’s replacement cost coverage. That ensures that no matter how much property values have changed, your insurance will pay to replace any lost or damaged property. Then, there’s actual cash value coverage. This coverage, as its name would imply, will only financially reimburse for the actual cash value of the lost or damaged property. Lastly, there’s “interim housing” coverage. This can be an additional portion of either of the above types of coverage, or a separate policy altogether. It ensures that you have financial means to live elsewhere, if need be, while any damage repairs are taking place to your existing home. But that’s not all there is to property insurance.

There are other considerations to take into account when purchasing property insurance. There are certain types of “perils” include in each policy. “Named perils” are those that are specifically named or termed in a property insurance policy. They commonly include theft, hail and windstorm damage, vandalism, damage from the weight of snow or sleet, water damage from broken plumbing, and our old friends, fire and smoke. Most property insurance policies do not cover floods or earthquakes, but there are some insurance companies that will issue these types of policies separately. As to your guests and workers, you can get a certain amount of liability coverage that will assist you in the event that someone on your property is injured and decides to sue. They have to prove that you were guilty of negligence in some way, though, before they can bring a suit against you.

There are many different types of property insurance policies. Some only cover the contents of your home, while others cover the structure, too. And as we noted above, just how much financial reimbursement you can receive depends on the type of property insurance you buy, and how much of it. There’s also renters insurance, to help those who don’t own the property, but still want some protection for their home’s contents.

Property insurance is a very valuable, very vital thing to invest in, and has been since 1666. Everyone has a home. It’s nice to know that with property insurance, they can keep it safe and sound.