The property insurance policy is the insurance that protects the physical goods and the equipment of the business or home against any loss from theft, fire, and any other perils. It can be an all-risk coverage policy that gives protection against all the risks. Or can a named-risk coverage policy give protection against only those perils, specified in the policy document.
Considering property insurance as an umbrella or package cover that offers a combination of covers through a single policy. It may include the homeowner’s policy, renter’s policy, flood insurance, shopkeeper’s policy, office package policy, and earthquake insurance policy. Such policies instead of just covering the risk of the property might also include some of the personal liabilities also.
Generally, the property insurance policy covers the risks of all the damages caused by fire, theft, wind, smoke, snow, lightning, etc. But, the property insurance does not cover any damages, caused by water due to flooding, water seepage, standing water, tsunamis, cyclones, etc. Some of the property insurance covers also exclude the losses due to earthquakes, molds, and the acts of war like terrorism, etc.
Case of Property Insurance Policy
On the night of 24th December 2014, a sudden fire erupted in the home of Mr. and Mrs. Shah, and smoke filled up the whole house. The fire spread so quickly that nothing was no solution to limit the damages and the whole house burned down. The good thing is no one was hurt, and the only loss was the property. Thankfully, Mr. and Mrs. Shah had a home insurance policy.
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They filed their claim with the insurance company and submitted all the necessary documentation. Since the house was beyond repairable conditions and requires being built again from scratch. They also received an estimated quote for rebuilding the house again.
The insurance company appointed a claim adjuster to review the claim which, after the site visits, collected necessary evidence. And consulting the experts finalized the amount of a claim at Rs. 25,00,000 should be paid to the Shahs. That is approximately 85% of the total rebuilding cost.
Therefore, if there had been no insurance coverage for the house, Mr. and Mrs. would have to incur the entire cost of rebuilding out of their own pockets.