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Property insurance encompasses protecting property against perils such as fire, flood and theft.
Important definitions. For the record, a peril is the cause of a loss. Tornadoes, fires and theft are perils. Hazards, on the other hand, are conditions that create or increase the chance of a loss due to a peril. Locating your new house on the site of a possible sinkhole would certainly be a hazardous choice. Failing to shovel the snow and ice off your sidewalk creates a hazard for those walking past your home. The terms hazard and peril are often confused with risk. This isn't important until you have a problem and must refer to the legal language in your insurance contract. But now that you are becoming an educated consumer of insurance, you'll want to read any contract you're thinking of buying to make sure that it covers exactly what you need.
Insurance companies have been at it for centuries, and they've thought of risks, hazards and perils you never dreamed you had. So they're well prepared to protect you from most of these problems via a standard policy at a reasonable price. You'll be able to keep that price down by electing to take the highest possible deductible you can afford. An annual review of your insurance with your agent will assure you that you still need what you're paying for and that no new risks have emerged.
To avoid spending money on coverage you don't need, consider carefully the various types of property and casualty insurance policies customarily available before you talk to your insurance agent. The basic forms are:
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