A property insurance policy is one of the most basic products in an insurance portfolio. A standard property insurance policy typically provides coverage for a building, and the contents within it, at a particular location. Despite the nautical-sounding name of inland marine insurance, it is simply one type of property coverage, with the key differences that allow it to offer more specific coverage than a standard property insurance policy.
Here are some of the key differences between inland marine and property insurance coverage.
Stationary Versus Movable Property
A standard property policy offers coverage for a named building and the contents that remain stationary within that building, or within a certain amount of feet from that building. A property insurance policy can typically provide financial reimbursement to the insured for property that is damaged or lost as a result of a covered peril. Computers, phone systems, furniture, company documents, machinery and inventory are commonly covered items.
An inland marine policy provides coverage to movable property – items that are not stationary – which can often be more difficult to insure. Items such as construction equipment, tools belonging to an artisan contractor or repair professional, field testing equipment, musical instruments or equipment and photography and video equipment can be covered by an inland marine policy.
Tailored Coverage Versus Broad Coverage
A basic property insurance policy often provides broad coverage for the insured. Because of this, there are usually a number of perils that are excluded in the policy. Contrarily, inland marine policies offer a more tailored covered, to meet the very specific insurance needs of the person seeking out coverage.
Because the coverage offered through an inland marine policy is so specific to the insured, the policy limits are usually higher than what is offered by a standard property insurance policy. Additionally, inland marine is most often written as an “all-risk” policy, which means it will provide coverage for all forms of peril unless specifically excluded, but it can also be written to only cover named perils.
Replacement Value Versus Depreciated Value
In a standard property insurance claim, the insurer will pay the cost to replace damaged or lost items with new ones, up to the policy limits. These items are usually included on the declarations page of the policy, and the policy’s limits are based off of the total value of all declarations.
With an inland marine policy, replacing items works differently, as it will usually pay only the depreciated value of the the items. This is, in part, because inland marine is typically used to cover higher-value items, as well as the higher rate of depreciation of movable property versus permanently installed property.
Though property insurance and inland marine insurance fall into the same category, they do not offer the same type of coverage. It’s important to know the key differences to ensure the right type of coverage is selected.
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