What does property insurance cover?

Property insurance is designed specifically to provide coverage for loss or damage to physical assets or possessions. This includes structures, such as homes and buildings, as well as personal property like furniture, electronics, and other belongings. The primary function of property insurance is to compensate policyholders for the financial loss incurred due to events like fire, theft, vandalism, or natural disasters that result in property damage.

In contrast, financial loss due to death pertains more to life insurance policies, which provide a benefit upon the insured's death rather than protecting physical property. Medical expenses from illness are covered under health insurance, addressing costs related to healthcare treatment rather than asset protection. Liabilities incurred from accidents fall under liability insurance, which protects against legal claims or damages resulting from one’s actions rather than covering the property itself. Thus, property insurance specifically focuses on safeguarding the policyholder's physical assets, making it the correct choice in this context.