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
A property insurance policy is a combination of multiple covers as mentioned above, and the policy can be bought as a comprehensive all-inclusive policy or as a package policy excluding some of the unwanted covers.
Property insurance typically covers damages or losses to the insured property caused by events such as fire, theft, vandalism, natural disasters, and accidents. It can include coverage for the structure, personal belongings, additional living expenses, liability protection, and sometimes even loss of rental income or business interruption.
A comprehensive cover may include any or all the following covers:
- Fire Insurance
- Burglary Insurance
- Flood & Earthquake Cover
- Office Insurance and
- All Risk Insurance
Why to consider buying property insurance?
Property insurance coverage is essential for safeguarding one’s assets and providing financial protection against unforeseen risks. It offers peace of mind by compensating for damages or losses resulting from events such as fire, theft, natural disasters, or accidents. By insuring property, individuals can mitigate the financial burden of repairing or replacing damaged assets, including homes, buildings, or personal belongings.
Property insurance coverage is crucial as it ensures that individuals and businesses can recover from unexpected setbacks without incurring significant financial hardships, allowing them to focus on rebuilding and restoring their properties. Overall, property insurance provides a crucial safety net against potential risks, offering security and stability in uncertain times.
Add on covers in Property insurance
Add-ons or endorsements available under property insurance may include coverage for specific perils like earthquakes or floods, increased limits for valuable items, coverage for home offices or businesses, identity theft protection, equipment breakdown coverage, and liability coverage extensions for unique situations like hosting events or operating short-term rentals.
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 physical harm caused to a visitor due to damaged property.
