The Beginners Guide to Property Insurance in the Philippines

Investing in the Philippines

Ask anyone about their life goals and you’re most likely to hear that owning a home is one of them. As a current or aspiring homeowner, it is essential to not only work for your dream home but also the means to protect it. Property insurance is one way to secure your home and other properties from all kinds of risk.

This article will provide you with everything you need to know about property insurance in the Philippines.

What is Property Insurance?

Property insurance is a type of insurance policy that covers the protection of property or liability for property owners. With a property insurance policy, an owner or renter is entitled to financial compensation if damage or theft occurs in the structure and its contents. It also covers financial compensation if a person–other than the renter or owner–is injured while on the property.

Getting property insurance in the Philippines should be a top priority for owners due to the Asian region’s tendency for natural disasters. Since 1990, the Philippines alone has survived 565 natural calamities, including cyclones, floods, landslides, tsunamis, volcanic eruptions, and wildfires. These disasters have caused extensive damages and loss of life, leaving many unprotected from these threats.

Property Insurance Policy Provisions

While provisions will differ between insurance providers, there are some standard elements included in just about every policy. The payout for these provisions will depend on the type of coverage, ranging from the appraised worth of the claims to deductibles from a set amount. Below are some provisions you can expect a typical plan to cover:

  • Damages to Interior/Exterior of the House

This provision protects against damages caused by fire and lighting on the exterior or interior of the house. Furniture, clothing, appliances, and other items within your home are also covered if they are damaged or destroyed by these causes. Should an incident occur, you can file claims on both the structure and items and receive an appropriate amount for repairing or replacing them. 

  • Damages Due to Natural Disasters

Some of the most common natural disasters in the Philippines include earthquakes, typhoons, and floods. These disasters are hard, if not impossible, to prevent and can leave you with massive losses. Home insurance policies with provisions for natural disasters or “acts of God” provide you with the necessary funds to rebuild and recover.

  • Personal Liability for Damage or Injuries

Accidents can occur at any time and involve people beyond the owner or renter, like relatives, neighbors, and other third parties. Having this provision in your insurance policy allows you to file claims on behalf of third parties when certain incidents happen on your property. For example, this can include an accident leading to a third party being injured or an item being damaged during a covered incident.

  • Additional Living Expenses for Repairs and Renovations

Repairs and renovations are key to maintaining a property. However, major renovations may require you to stay out of your home as repairs are ongoing. This provision allows you to claim expenses for out-of-home stays, meals, and other incidental costs you may incur while waiting for repairs to be completed. 

How Your Insurance Premiums are Affected

The premium for your property insurance is determined by a number of factors. In general, providers will raise premiums for properties they determine to be more at risk. 

  • Insurance Policy

Property insurance policies are not made equal. Different providers may cover more than basic provisions or offer add-ons to expand the plan’s coverage. For example, expensive items like jewelry and fine art pieces may need a rider to ensure that they are adequately covered. Additional coverage can also include other coverable events, such as man-made disasters and robberies.

  • Property Location

The location of a property is just as important to owners and renters as it is to insurance providers. Depending on where in the Philippines your property may be, it may be more at risk for certain natural disasters like floods, earthquakes, or volcanic eruptions. Properties in higher-risk areas are likely to receive higher premiums. Additionally, the quality of the neighborhood your home is in can also affect your premium. Because of this, areas prone to theft, vandalism, or gang activity may cause the premium to increase.

  • Condition of the Property

The condition of your property can affect the amount of risk it may have, which raises your policy’s premium. The age of your property, the materials used to construct it, electrical systems, plumbing, and other features that can affect how your property holds up are taken into account. Older homes with older structures and features are likely to have higher premiums, as they are more likely to need replacing. 

Keep Your Property Protected

With the risk of natural disasters constantly present, it is essential to secure your home and other properties from damage and other dangers. With the right property insurance plan, you have the reassurance that you can keep losses to a minimum. It’s a matter of finding the policy that best fits your needs.

Like with property insurance plans, good deals are key even in real estate. For some of the best real estate deals in the Philippines, visit RE/MAX Gold for listings.

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