Property Insurance - Why it is necessary and what types can a property owner apply for?
Published on 24th Aug 2020 EST Read time 4 Mins
Property insurance is a type of insurance policy that can provide financial reimbursement to the property's owner in case of any damages or theft. Property insurance helps in protecting against the various risks to which aproperty can be susceptible such as fire, robbery, or any other natural catastrophes.
Property insurance can provide coverage to individuals, organizations, and other entities as well. In addition to providing cover forproperty, this insurance type would also provide cover for liabilities i.e. cover for injuries caused to a person / property other than that of the property owner.
Why a property owner should purchase property insurance?
Natural perils like floods, earthquakes, cyclones can occur anytime and it is good to have property insurance for coverage against the damages caused by these perils.
Man-made risks such as riots, thefts, terrorist attacks, strikes, etc. can cause damage to property, and property insurance would provide complete protection.
Property insurance can help in obtaining compensation against business losses, which can occur due to factors like machinery breakdown, equipment damage, etc.
Types of property insurance a property owner can purchase
Some of the common types of property insurance available in India are listed below.
Fire and special perils policy
The standard fire insurance policy would offer protection against any loss or damage caused to property due to fire or other allied perils.
Different types of properties that are covered under the fire insurance policy are offices, shops, hospitals, places of worship, industrial or manufacturing units with coverage for machinery and manufacturing equipment along with their stock of finished/semi-finished goods, raw materials, etc.
"Fire Insurance", apart from the protection against fire, also offers insurance against other allied perils such as lightning, cyclone, typhoon, flood, hurricane, missile testing operations, etc.
Any damages caused due to war, invasions, nuclear perils, pollution, or any damages caused to electrical machines because of a short circuit, excessive pressure, etc. are not covered under the fire insurance.
Burglary insurance is usually offered for a residential premises or a business enterprise. The assets covered under this are stocks, Contents and valuables if specifically stated...
Burglary insurance would cover armed robbery, hold up, or any type of forced entry.
Coverage against loss/damage caused to the insured property due to burglary or damages caused to the premises due to burglary is provided by this insurance.
There is no coverage provided for jeweler, precious gems, theft by using a duplicate key, which is not obtained by force a loss due to wars, riots, strikes, etc.
All-risk insurance would offer coverage for damages caused to equipment especially portable equipment. This insurance is offered selectively and its design is different for different companies.
“All-risk insurance” does not imply that everything would be covered under this insurance policy. This policy typically provides a comprehensive cover to the listed equipment/ content unless it is specificallyexcluded from the policy wordings.
Damages caused due to actions of moths, mildew, wear and tear repairs, over winding/denting of watches/clocks, any legal liabilities, war perils, any nuclear risks, breaking of fragile items unless caused due to accident to the conveyance medium, etc. are not covered under the all-risk insurance policy.
Points to keep in mind while purchasing property insurance
Property owners can either purchase property insurance online, directly from the insurance provider, or through insurance intermediaries.
Property insurance can be purchased for a property that an insured has an insurable interest in.
The complete and correct address of the property, which is to be insured, must be provided during the purchase of the policy.
A property owner should not do any wrong declaration about the value of the property, which is to be insured as it can cause disputes at the time of claim. Any past claims on the property to be covered should be declared
Property owners should read the policy brochure/prospectus carefully for understanding the inclusions and exclusions of the policy.
When it is about protecting your property, everyone would want the right cover possible. So, property owners should choose the best property insurance policies and protect their property from various potential risks.Homeowners can buy HDFC ERGO home insurance in a hassle-free manner and ensure that their property is safe and secure.
This blog is written by Deepika Mathur, CEO Markel, Veteran in Insurance Industry
Deepika Mathur highly recommends opting for Home Shield Insurance to ensure your dream home is protected always! She also recommends tenants to opt for Home Shield Insurance to cover their valuable home belongings like portable electronics and furniture.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales. Standard Fire & Special Perils UIN IRDAN125P0015V01200203, Home Insurance ( Revision)- Multi Year Policy UIN HDE-OT-P14-70-V02-13-14, Standard Fire and Special Perils IRDAN125P0015V01200203, Home Shield Insurance UIN IRDAN125P0001V01201718, UID No. D2HO871