We build our home with lots and lots of dreams, take measures to protect our families and assets in our home by installing security systems, and yet forget to take one essential protection measure- property insurance. Most people realize the importance of property insurance only after they have suffered uncertain losses. Although most people are pursued by banks to purchase insurance for their property, not many people fully understand what their policy does or what type of property insurance coverages are.
So, if you want to understand the different types of property insurance policies in India or looking for the right insurance coverage for your property, this property insurance guide will help you navigate the ins and outs of choosing the necessary property insurances for your house.
Contents
- What is Property Insurance?
- Types of Property Insurance Coverages in India:
What is Property Insurance?
Property insurance is a broad term for insurance policies that cover losses and damages to an individual’s residence along with the assets in the home. In case of any unfortunate event, the property insurance you have taken for your property will either cover the cost of repairing or replacing the property, pays the actual cash value, or will pay more than the coverage limit if the costs for construction have gone up. Thus, having property insurance for your house gives peace of mind in times of crisis.
Also Read: Important real estate Terms and definitions that every property investor should know
Types of Property Insurance Coverages in India:
1. Standard Fire and Special Perils Insurance
What is it:
Standard fire and special perils insurance is a traditional insurance cover that offers protection against damages and loss caused by fire and allied perils which are named in the policy. This insurance can cover a building, plant and machinery, furniture, fixtures, and other content. It can be bought by property owners for their own house as well as tenants residing in a rented house.
What does it cover:
- Natural calamities like fire, earthquake, storms, floods, forest fire., landslide
- Damages caused by missile testing operations, strikes, riots, explosion/implosion, and damages caused by malicious intent.
- Damages caused due to vehicle collision.
- Damage caused due to leakage from automatic sprinkler installations.
2. Home Structure/Building Insurance Coverages
What is it:
Home structure/building property insurance covers the structure of your house from any kinds of dangers and perils. This cover also protects the permanent fixtures within the house like kitchen and bathroom fittings. In short, it is an insurance cover for the framework that supports the house.
What does it cover:
- Damages to fitting in kitchen, washrooms, ceilings, etc.
- Damages to shed or garages on the outdoor.
3. Public Liability Property Insurance Coverages
What is it:
Technically, public liability property insurance covers the cost of claims made by a third-party or public for incidents that occur in connection with your property. As a property owner, having public liability insurance is crucial because if any guests or third-party incur any damage to themselves or their properties inside your home and this insurance provides coverage against the same.
What does it cover:
- Bodily injury
- Property damage
- Lawsuits, investigations, and settlements
4. Burglary and Theft Property Insurance Coverages
What is it:
This is one of the most important property insurance coverages that you need to have regardless of whether you’re a landlord or a tenant. Burglary and theft insurance offers coverage for any loss or damage caused to the insured property due to burglary attempts or housebreaking. It also provides coverage against loss or damage caused to contents that are insured in the house.
What does it cover:
- Damage to premises due to housebreaking or burglary
- Loss or damage to insured contents in the house.
- Armed robbery or hold up.
- Forced or violent entry
5. House Content insurance
What is it:
Your house is not just the mere building and the land on which stands, it includes the television, washing machine, air conditioner, computer, and other content in your house. These things make you feel at home. This is why you need to insure not just the house but also the contents inside the house. House content insurance protects the goods inside your house from loss or damage caused due to theft, natural disaster, or other unfortunate incidents.
What does it cover:
- Documents
- Portable equipment
- Jewellery
- House interiors.
- TV, Refrigerator and other appliances.
6. Renters insurance
What is it:
Renters insurance is not something that many people know of. As a tenant, you might not even think about home insurance as your landlord would have already insured the house. But what about your valuable belongings in the house like furniture, electronics, and other things? This is why you need to take renters insurance coverage for protecting your belongings. It also covers the tenant’s liability in an unfortunate event where a visitor is injured on the premises.
What does it cover:
- Financial reimbursement to cover a tenant’s lost or damaged possessions.
- Tenant’s liability in the event that a visitor is injured on the premises.
7. Landlord’s insurance
What is it:
Landlord’s insurance is a special type of insurance coverage that is specifically for landlords. This policy is designed to address the needs of landlords. Landlord insurance assures peace of mind to landlords as it provides coverage against numerous troubles related to the property. This insurance even helps landlords to meet the financial losses related to rental properties.
What does it cover:
- Damages to the structure or content of the property due to natural disasters, theft, etc.
- Liability coverage if a tenant or anyone in your property gets injured or suffers losses due to your negligence.
- Loss of income due to reasons mentioned in the policy document.
Most property owners tend not to purchase home insurance policy mostly due to high premiums and lack of sufficient information. But, as most insurance products go, the true value of a property insurance policy can only be appreciated when an unfortunate event strikes you at an unexpected time. So, if you don’t have property insurance, it might be too late by then. This is why it is crucial to safeguard your property against any losses faced due to human-made errors or natural disasters. In some cases, property owners may take a policy that they don’t necessarily need in the first place. This is why you need to understand and choose the right property insurance for your property. Thus, this guide will help you understand the different types of property insurance coverage in India.
