What is the primary purpose of property insurance?

The primary purpose of property insurance is to protect against loss or damage to physical property. This type of insurance is designed to financially safeguard the policyholder from unforeseen events such as fires, theft, vandalism, or natural disasters that can result in physical damage to homes, commercial buildings, or personal belongings. When a covered event occurs, property insurance provides compensation for repairs or replacement, helping individuals and businesses recover financially from such losses.

While other options may have their specific purposes—such as providing income during retirement or covering legal fees for lawsuits—these are not the focus of property insurance. Property insurance specifically addresses the need for security regarding tangible assets, making it a critical component for anyone looking to protect their investments in physical property. Investing in real estate is a financial strategy in itself and does not align with the core function of property insurance.