What is Property Insurance defination?
Property insurance as the name suggests provides cover against damage and theft of property to the owner or tenant of the property. It can be used to cover the structure of a building, or the contents kept inside the building by its owner(s) or tenants.
This insurance policy will help the insured reduce the financial burden of recovering from loss due to:
- Accidental damage to the structure of the property
- Theft or burglary of the contents inside the property
- Physical harm caused to a third party on the premises of the property
Property insurance is a combination of multiple covers as mentioned above, and policy can be bought as a comprehensive all-inclusive policy or as a package policy excluding some of the unwanted covers.
A comprehensive cover may include any or all the following covers:
- Fire Insurance
- Burglary Insurance
- Flood & Earthquake Cover
- Office Insurance and
- All Risk Insurance
A Case of Property Insurance
Mr. Aggarwal, living in Nasik had bought a plot of land several years back for the purpose of constructing an independent home in the future. Two years back he started the construction, and the two-story house is finally ready. While he will shift to his new home with his family next month, Mr. Aggarwal plans to let out one floor to a tenant.
Currently, he has taken comprehensive homeowners insurance for the whole structure where he is going to stay with his family. The policy offers a cover in case of damage to the dwelling, other structures, personal property in the house, and loss of use. The cover also includes liability insurance which protects him and his family against third party claims.
The policy taken is like an umbrella cover which under a single document provides a combination of covers. So, for various calamities, he will not need to manage several papers. Instead, he can use a single point of contact to file the claim.
While searching for the tenant, he always advises the prospects that they insure their belongings under a renters’ policy so that they don’t have to bear the burden of any damage to their goods due to any calamity or theft.
Mr. Aggarwal has also insured his office premises with an Office Package Policy. The policy, apart from the structure and furniture, etc. in the office, covers any third-party liability arising out of a physical harm caused to a visitor due to damaged property.