What are Typical Types of Property Loss Insurance Policies?

• May 22 2023
• |   Insurance

Property insurance exists so people can transfer the financial risk of damage to their property to an entity with much deeper pockets. In exchange for a fee, property insurers promise to pay certain amounts to property owners when their property is damaged by a cause or in a way that the insurance company has agreed to cover.

Insurance is intended to help people manage the possibility of accidental losses that could financially devastate a family or business owner. However, insurance companies are also in the business to make a profit. Handing out money is not in the best interests of their bottom line, and sometimes insurance companies try to avoid their obligation to pay at the worst possible times for policyholders.

Types of Losses in Insurance

When most people think of insuring property, they think of their home and its contents, the building and equipment used in their business, and their vehicles. However, separate policies exist for each type of exposure, and each policy is specific regarding what is covered and the extent of the coverage. In addition, the insurance for various types of property is underwritten so that the guidelines do not cover the same exposures.

Losses Covered and Not Covered by Property Insurance

Property loss insurance companies may specifically list the types of perils that are covered or may say they cover all perils and then exclude certain perils or circumstances.

A typical homeowners’ policy might say it covers all ‘risks of accidental direct physical loss’ to a home in a small paragraph and then go on to describe in many paragraphs the exceptions to such a broad grant of coverage.

Losses that are not covered, in addition to those caused by excluded perils, include damage caused by:

• Continuous or repeated water seepage
• Frozen pipes when the house is vacant unless the homeowner has taken reasonable steps to protect it
• Vandalism of a house empty for at least 30 days
• Exterior damage done by the freezing, thawing, pressure, or weight of snow or ice
• Hidden defects, mold, smog, rust, deterioration, and animals.

Losses that are covered will be specific to the policy. The most common covered losses for homeowners’ insurance are fire, lightning, windstorms, and hail.

There are often conditions that limit the application of coverage in particular circumstances. Whether the policy conditions necessary to trigger coverage have been met is where insurance companies can try to bully their customers out of collecting insurance payments.

Types of Property Damage Claims

While there are numerous types of property damage claims, the following are the most common in Nevada:

• Fire and lightning
• Explosion
• Windstorms and hail
• Vehicles
• Theft
• Riots
• Smoke
• Falling objects.

A home is often the largest property people insure against damage or loss. Homeowners’ insurance policies cover repairing or replacing structures and personal property damaged by specific perils.

The policies also cover the costs associated with the loss of use of the damaged property. If a covered peril did not cause said damage to the property, an insurance company has no obligation to pay for the loss.

Exposures Excluded by Property Loss Insurance Policies

Property loss insurance companies exclude the same basic perils from coverage under their policies. Some perils are excluded because the damages could be catastrophic – too big a risk to profitably insure – like earthquakes, floods, war, or nuclear hazards. Other perils that are specifically excluded include pollution, enforcement of laws pertaining to construction or demolition, offsite power failures, and the intentional actions of an insured.

One of the common exclusions turns on a question of fact and an insurance company may try to use it to deny a property loss claim. Coverage is excluded if a policyholder neglects their property. For example, suppose a pipe has been leaking for several months and it is reasonable to assume that the owner was aware of the leak and ensuing damage. If the policyholder made no effort to fix the leak or mitigate the damage, the insurance company may not cover it.

What is reasonable in a given situation is always based on the particular circumstances a person is faced with at the time. Policyholders cannot be denied coverage for failing to prevent property damage if there was an unreasonable risk to themselves or others by doing so.

Property Insurance Policy Coverage Issues

When a property loss insurance claim is made, the insurance company looks at every aspect of the loss to determine if any provision of the insurance policy has been violated.

• Is the damaged property covered by the policy?
• Was the loss caused by a covered peril?
• Does any exclusion apply?
• Did the policyholder comply with all necessary conditions?
• Are there any circumstances that could limit the amount needing to be paid out?

An unsuspecting policyholder may not be aware of how courts have interpreted the provisions of insurance contracts and may not know how to successfully refute coverage issues raised by an insurance company.

Indications an Insurance Company is Not Dealing Fairly

The law recognizes that insurance contracts are written by insurance companies with a profit motive in mind. The insurance industry is heavily regulated, and insurance companies that do not play nice can be held accountable to their policyholders for acting in bad faith.

An insurance company acts in bad faith when it unreasonably tries to avoid paying a legitimate claim with any number of dishonest or unfair tactics. Some actions that may be warning indications of bad faith by an insurance company are:

• The company is hard to contact or communicate with
• The company unreasonably delays response times or claims processing
• The company misrepresents the terms of the insurance contract
• The company attempts to settle a claim for less than it’s worth
• The company uses coercive practices to try to settle claims
• The company denies a valid claim.

A person who suspects their insurance company is acting in bad faith will need the help of an insurance law attorney to bring a lawsuit against the company.

What a Nevada Insurance Law Attorney Can Do for You

Property insurance coverage is based on a contract between the property owner and the insurance company. The contract states what is insured, the amounts that will be paid, and what occurrences will trigger coverage. Insurance companies tend to take a very narrow view of how much they need to pay or even whether they need to pay at all.

This can be frustrating for policyholders who have experienced a property loss after faithfully paying their premiums. A Nevada insurance law attorney knows the provisions in property insurance contracts and how the law requires them to be interpreted.

Insurance law lawyers are familiar with the issues that often come up between property owners and insurers and understand what is necessary to make the insurance companies honor their agreements.

Why Leverty & Associates is the Right Law Firm to Handle Your Insurance Law Matter

It is no fun to experience a property loss and then have to battle your insurance company to try to collect payment for the damages. You bought insurance so you would have some peace of mind regarding unexpected losses. You did not anticipate having a fight on your hands to get what you thought you had paid for.

At Leverty & Associates, taking on insurance companies who have a legal responsibility to pay our clients but are not doing so is a cornerstone of our practice. Insurance companies are legally required to act in good faith and deal fairly with policyholders.

For more than 40 years, the insurance law attorneys at Leverty & Associates have helped property owners in Nevada get the insurance coverage they had a right to when the insurance company refused to cooperate.

Where to Turn When Your Insurance Company Acts in Bad Faith

When all is said and done, insurance is a numbers business. Insurance companies need to take in more than they pay out. That gives insurance companies the incentive to try to keep your money without having to pay your claims.

The law favors the policyholder because the insurance company is in a more powerful bargaining position with respect to the terms of the contract. Insurance companies that delay or deny legitimate claims are not viewed favorably by judges or juries, and damages may be awarded in addition to payment of the claim.

Insurance is something we all rely on to be there for us when some of the worst things happen. Thinking the resources we counted on might not be available makes an already bad situation just that much worse.

If your insurance company has wrongfully denied your claim or is otherwise trying to avoid paying what your claim is worth, Leverty & Associates can help you get the compensation you are entitled to.

The insurance law attorneys at Leverty & Associates understand how important collecting insurance money can be after experiencing a property loss. They also know how to expose insurance company practices that are in violation of the law and force the payment of legitimate claims.

In Reno or Las Vegas, contact Leverty & Associates or call 775-322-6636 (Reno) or 702-507-0201(Las Vegas) to schedule a free consultation.