Is There a Difference Between House Insurance & Property Insurance?

There are differences and similarities between a home insurance policy and property insurance policy. It's almost like taking a yellow circle and a blue circle and allowing a portion of them to overlap to make green. The green overlapping section represents the characteristics that both policies have in common. The yellow and the blue represent characteristics that are dissimilar.

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Property Insurance

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Property insurance is a first-party coverage. In other words, in an insurance contract the first party is the insured and the second party is the insurance company. If there is a loss on a first party coverage, the insured gets reimbursed.

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Property Characteristics

Let's pretend that the property policy is the blue circle. Property policies insure commercial buildings, homes and can also be found on boat and automobile policies. This section of the boat or automobile policy that reimburses the driver or boat owner for damage to her own car or boat comes from the property section. As you can see, a property policy is not just limited to the home.

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Home Insurance Policy

A homeowner's insurance policy is a multi-line policy meaning that it has more than one type of coverage. In our example the homeowner's policy is the yellow circle. It not only has property coverage but it has liability coverage, too. For example, if a home were to suffer a fire a loss, the insurance company will pay the policy holder the amount it takes to repair or replace the building. That is the first party, property section of the policy. The liability section of the policy, called third-party section, responds if someone trips and falls on your sidewalk and decides to sue you. The insurance company will defend the law suit and pay the injured party via the liability section of the homeowner's policy.

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Comparing Property and Home Insurance

Now that we've defined the blue and the yellow circle, it's time to overlap a portion of the blue property circle, the part that insures homes, and overlap it with a portion of the yellow property homeowner circle, the first-party property section. These two aspects of each policy are the same. Anything outside of the green overlapping section, which remains blue or yellow, differ and represents the dissimilar portion of each coverage.

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Therefore, to go back to the original question: "Is there a difference between house insurance and property insurance?" The answer is yes, but there are also similarities.

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