Common Types of Property Insurance to Opt For in India

Posted on: May 17, 2024 | 3 mins | Written by: HDFC ERGO Team

Common Types of Property Insurance to Opt For in India

Before we discuss types of property insurance, let's understand the wholesome meaning of property. According to the Cambridge Dictionary, property is anything that belongs to someone, and that person has legal privileges over it. It could be tangible, like a home, car, or machinery, or intangible, like patents, stocks, etc. You can insure these properties with property insurance against most risks, like theft, fire, flood, etc. However, one type of property insurance only covers some of these risks. To protect your assets against these risks, it would be best to look into different types of property insurance. In this article, let's discuss various types of property insurance. Knowing about them will help you decide which insurance is best suited for your needs. Various Types of Property Insurance:

1. Home Insurance

What is it:

If you are a homeowner, you must get a home insurance policy to cover you financially for losses incurred due to property damage. You can insure your houses, individual buildings, apartments, villas, etc. A home insurance policy will cover you against damages to the structure of your home and stolen or damaged belongings.

What does it cover:

• Damages due to burglaries.

• Damages due to fire and natural disasters.

• Damages due to man-made disasters and hazards.

• Damage to belongings

2. Standard Fire and Special Perils Insurance

What is it:

In simple terms, fire insurance will cover your property against loss due to fire and allied perils like lightning or the explosion of domestic appliances. Usually, the policy will have a list of allied perils covered. Under this type of property insurance, you can insure your plant, machinery, building, furniture and fixtures, and other valuables.

What does it cover:

• Damages from natural calamities like earthquakes, fires, forest fires, lightning, floods, storms, etc.

• Damages due to riots, explosions, implosions, strikes, missile testing operations, etc.

• Damages caused by malicious intents.

• Damages due to vehicle collision.

• Damages from leakages from sprinklers and other installations.

3. Flood Insurance

What is it:

Usually, standard property insurance policies don't cover flood-related damage. Having flood insurance will add an extra layer of security. This type of property insurance provides specific coverage for losses resulting from overflowing inland or tidal waters, rapid accumulation of surface water, and mud flows.

What does it cover:

• Damages due to floods from heavy or prolonged rainfall.

• Damages due to snow, high tides, and thunderstorms.

• Damages from floods because of monsoon rainfalls.

• Damages from clogged drainage or dam collapse.

• Coverage for losses resulting from overflowing inland or tidal waters

4. Earthquake Insurance

What is it:

As the name suggests, earthquake insurance is a type of property insurance that covers you financially for damages caused by earthquakes. It specifically protects against structural damage and other losses resulting from seismic activity.

What does it cover:

• Structural damage

• Damage to personal belongings.

• Coverage for additional living expenses incurred if the insured property becomes uninhabitable.

• Coverage for lost rental income if the insured property is used as a rental property and becomes uninhabitable.

• Damage to other structures on the insured property.

5. Theft Insurance

What is it:

Theft insurance is a type of property insurance that covers losses from theft or burglary. It protects individuals, businesses, and homeowners by reimbursing them for the value of stolen property or damages caused by theft-related incidents.

What does it cover:

• Stolen property.

• Damages caused by the theft or attempted theft of property.

• Theft of cash.

• Theft of business property, like equipment, inventory, supplies, etc.

• Coverage for additional living or business expenses incurred while repairs are being made if the incident has rendered the property temporarily uninhabitable or unusable.

6. Commercial/Business Property Insurance

What is it:

Under this type of property insurance, you can insure business or commercial properties such as offices, shops, restaurants, factories, and warehouses. It protects businesses and organisations against financial losses from damages to their commercial properties. You can also ask for commercial/business property insurance tailored to your specific needs for special coverage.

What does it cover:

• Damages to the structure of the property insured, including the building and any attached structures.

• Damages to business-owned or leased personal property, including equipment, machinery, furniture, fixtures, inventory, and supplies.

• Coverage for lost income and ongoing expenses such as payroll, rent, and utilities due to temporary shutdown or interruption of business operations.

• Coverage against claims of bodily injury or damage from accidents on the insured property.

Conclusion

Property insurance can safeguard you and your business against financial losses due to various risks. In India, common property insurance policies cover the different needs of property owners, offering protection against many unforeseen events. Property insurance ensures you are adequately compensated for property damage or losses.

Disclaimer The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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