Benefits of Property insurance for new apartments in India

Posted on: May 26, 2025 | 3 mins | Written by: HDFC ERGO Team

Benefits of Property insurance for new apartments in India

Buying a new home is a very significant milestone, especially in the Indian context. With the changing times and demands, and alterations of choices, nowadays most people prefer buying a new apartment rather than a standalone house.

But, whatever the property type is, purchasing is not enough. Once you buy it, it becomes your responsibility to ensure complete protection of your haven.

In this context, we can mention the insurance of a home insurance plan or property insurance. Depending on the nature of the property in question, you can consider investing in flat insurance, apartment insurance or villa insurance.

In the case of any rented property, a renters insurance plan will care for the belongings present in the concerned property.

What is property insurance?

Property insurance is a mutual agreement and significant financial service that the insurance companies offer to ensure the safeguarding of the property of the policyholder concerned, against specific perils, risks, losses, and damages.

The policyholders can ensure the protection of their house building structure and its contents as per the provisions of the chosen policy plan by paying a fixed premium amount at regular intervals. Maintaining this policy allows you to retain your peace of mind even under challenging circumstances and undesirable surprises.

Importance of property insurance

Once you understand the utility of property insurance, it will help you to make an informed decision. So, we have elucidated some of the major highlights of the property plan:

1. Comprehensive coverage:

Property insurance is crucial to ensure the protection of your property, be it a standalone individual house, an apartment, a villa, a commercial building, etc. Unforeseen accidents may occur at any time causing damage to the property. However, a comprehensive property plan ensures protection and financial compensation under specific circumstances.

2. Protection against natural calamities:

Severe natural calamities might cause havoc to land, buildings, and other properties. Such calamities include floods, earthquakes, cyclones, etc. However, with the correct property insurance cover you can receive compensation for losses and damages caused by natural calamities based on the scope of your chosen plan.

3. Theft and vandalism coverage:

You may face unprecedented losses and damages due to theft and burglary. However, a comprehensive property insurance plan will ensure your compensation and coverage for damages caused by such malicious acts.

4. Third party damage coverage:

In case a third party faces any damage or loss in your insured property or due to your property, your comprehensive property plan allows you coverage for such liability issues. Based on the chosen term plans, you will receive financial support for legal claims and other incidental charges.

5. Rental protection:

Property insurance works critically well for those who have rented out their property. Here the plan covers rent loss, legal disputes, damages caused by tenants, etc. allowing a safety net to secure your property.

Advantages of property insurance (God)

Some of the typical advantages of property insurance include the following:

1. Tax benefits: One often overlooked but significant advantage of property insurance is that it allows tax benefits u/s 80C of the IT Act. This reduces your total taxable income, thereby reducing your overall tax liability.

2. Comprehensive coverage: A competent property plan allows comprehensive coverage for your home and its contents against unforeseen circumstances based on the terms of the chosen plan.

3. Affordable premiums: Usually home plans are reasonable when compared to several other insurance variants, making them easily accessible.

4. One stop solution: A property plan acts as a reliable solution for risk mitigation related to your property and your belongings, allowing you to retain your peace of mind despite challenging circumstances.

5. Swift recovery: A well-selected property plan can easily expedite the property restoration procedure and allows you a quick return to normalcy.

Exclusions

Although the types of exclusions differ with the type of property plan chosen and the specific insurer concerned, however, certain standard exclusions are as follows:

1. Terrorism: Usually a standard property plan does not insure damages caused by acts of terrorism.

2. Civil war/military attacks: Any damages caused due to civil war or military attacks usually do not get covered under a property plan.

3. Wilful or voluntary destruction: If you wilfully and voluntarily cause any damage to your property, your insurance company will not pay any compensation based on the circumstances.

4. Wear and tear: Any damages caused due to natural wear and tear do not fall under the purview of property plan coverage.

5. Non-occupancy: Depending on the circumstances, certain typical damages might not be covered by this plan in case the property in question remains unoccupied for a prolonged period without any prior information to the insurer.

6. Minor damages and infestations: Losses or damages caused by rodents and termites never receive any insurance coverage.

Factors to consider

As a homeowner, when you are purchasing a property plan or home insurance, the critical factors that you must consider include the following:

1. Coverage variants:

Home plan can be broadly classified into 2 variants:

• Building insurance that allows structural damage cover

• Content insurance offers coverage for personal belongings present in the home.

• Pro tip: It is best to opt for both to ensure optimum coverage.

2. Coverage levels:

Insurance plans may be based on:

• Actual cash value considering depreciation

• Replacement cost allows rebuilding costs

• Extended replacement value, allowing additional protection beyond the declared coverage limit

3. Property value evaluation:

Before investing in insurance, you must critically assess the value of your concerned property along with its belongings to ensure sufficient coverage.

4. Comparative study:

Before zeroing in on any one plan, you must compare multiple competent plans offered by different insurers. This will help you understand the scenario well. Consider the coverage extent, premium, inclusions & exclusions, deductibles, claim settlement process, etc. to grab the best deal at the most affordable rate.

5. Reputation of the company:

Before final selection, you must justify the market credibility and trustworthiness of the insurance company concerned. Consider the CSR and the customer reviews before deciding.

Who can buy it?

You can purchase home insurance or property insurance if you happen to be the legal owner, landlord, authorised occupier, or a valid tenant, provided the concerned building is utilised for residential purposes only. You can purchase the cover for any particular item or object, provided you are the legal owner, purchaser and responsible for its well-being and security.

Documents required

The list of documents essential in this respect includes:

• Ownership proof: Necessary property documents proving your valid ownership

• Identity proof: Any legal government-approved authentic identity proof

• Property details: This may include but is not limited to inspection reports, photos, structural details, etc.

Apart from this, you need to maintain spotless credit records along with claims history to enjoy the premium costs and better insurance eligibility.

Steps to purchase property insurance for a new apartment

To purchase property insurance for new apartments, you need to follow these simple steps:

1. Critical assessment: Critically consider the value of the concerned property and the belongings to decide the sufficient coverage amount.

2. Research: Undergo critical research and comparative study among various competent plans before making your final decision.

3. Quotes: Request quotes from various insurers to grab the best deal.

4. Insurer evaluation: Always consider the reliability and reputation of the chosen insurance companies, including ratings and customer reviews.

5. Policy details: To understand the chosen plan details, you must read the policy fine print including the deductible clause, inclusions & exclusions, etc.

6. Apply: Once you have decided, visit the official website portal of the insurer and select the plan. Fill out the application form and submit/upload the necessary documents.

7. Payment: Clear the premium dues using any reliable payment mode to activate the plan.

8. Plan issuance: Post processing, the concerned insurer issues the plan and you receive the plan papers shortly at your registered email address.

Conclusion

It is always wise and prudent to ensure the protection of your beloved and expensive property against unforeseen circumstances, protecting and ensuring efficient finance management. Comprehensive plans allow risk mitigation especially associated with theft, burglary, natural calamities, rental properties and third party liabilities. The importance of property insurance is immense and it is always advisable to maintain one although not legally mandatory.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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