Property insurance is a broad term for a series of policies that provide either property protection coverage or liability coverage. Property insurance provides financial reimbursement to the owner or renter of a structure and its contents in case there is damage or theft, and to a person other than the owner or renter if that person is injured on the property.
There are three types of property insurance coverage:
- Replacement cost
- Actual cash value
- and Extended replacement costs
Replacement cost covers the cost of repairing or replacing property at the same or equal value. The coverage is based on replacement cost values rather than the cash value of items.