Property insurance is based on classical insurance principles, while offering a vast array of approaches. Today, insurers design numerous programs pooling different risks; however, the front line is always given to fire and explosion risks. The standard policy covers the most common types of risks, whereas all-risk extended coverage provides protection against any events, except for those specifically excluded from coverage. As all-risk extended coverage offers protection against risks that are beyond the basic coverage.
Having this coverage, the client is insured against any type of events, except for exclusions specified in the policy. The list of exclusions is governed by the insurance rules and the policy. In some situations the list can be downsized or extended, depending on the type of the property, the needs and the budget of the insured.
One of the most important tasks in All-Risk Property Insurance is proper estimation of the amount of coverage based on the replacement cost or book value. Replacement cost (insurance based on the «new for old» principle, i.e. the cost of the new comparable property) is a better solution in the event of loss. Book value (the value that factors in depreciation) is a better choice for new properties. In all other cases, book-value based insurance is associated with additional expenses as depreciation is covered by the owner.
Competent estimation of the amount of an unconditional deductible is of paramount importance in insurance.
When seeking insurance for a large-size property, the prospect client should always remember about importance of pre-insurance inspection (survey) performed by a competent risk engineer, without seeing it as a ploy invented by insurers in order to find out all the bottlenecks and increase insurance prices. The survey is essential for proper assessment of the risk level and for the further decision on optimum terms and conditions of insurance as well as on recommendations that will help the insured to minimize his/her exposure to loss.