If you are an owner of property you are likely to bear in mind how not to lose your property and use it at your pleasure. However you can lose the property due to several kinds of natural disasters and calamities. Therefore it is necessary to insure the property to lower your eventual loss as much as possible. Do you know how to insure your property?


It does not concern household insurance

First it is important to mention that property insurance differs from household insurance. While household insurance covers losses and damage of household appliances (furniture, electronic devices etc.), property insurance includes insurance of house parts- roof, walls, floors etc. Indemnity is very important for insurance of the property. 



That is the area where many owners make mistakes because they often under-insure their property. There are two different ways to insure a property.  It is not possible to insure the property on its market values. Insurance companies do not regard where the property is located. Two different properties in the same state and of the same size will be insured completely under the same conditions either it is located in Prague on Wencesla’s Square or in village near state border.


Two kinds of property insurance

Property can be insured according to its value in time frame or according to its purchase. If you insure the property by its value in time frame, then during contracting the insurance, state of property will be assessed with regard to the fact that during the time the property wears out.



Compensation of the insurance would be of the value which the property would have at that time. On the other hand, if you contract insurance according to its new price, then the compensation would be equal to what it cost to purchase/ build new property. From the logic of this is apparent that insurance would be lower in case you insure the property on its value in time frame.


But also the indemnity will be lower. In case of natural disaster when it comes to destroying of the property however this sum of money would not cover purchase of the new property.