Do I Need A Property Insurance for Land?
Do I Need A Property Insurance for Land?
Published on May 26, 2021. EST READ TIME: 3 minutes
![Do I Need A Property Insurance for Land? Do I Need A Property Insurance for Land?](/images/default-source/default-album/43.jpg)
Property insurance is bought not only for the purpose of coverage, but also as a backup in case things go wrong. It covers your house and its contents. However, many of us are unaware that it covers the land on which the property is built. Before making a buying decision, it is beneficial to understand the insurance cover’s inclusions and exclusions.
Property insurance is divided into add-ons that cover different risks ranging from earthquakes to fires and floods. The fire and allied sections are required, but you can choose from the other sections. It is best to choose maximum add-ons for a comprehensive cover.
Is land covered in property insurance?
You should look for what is covered and what is not. Property insurance does not cover land. As a result, buying insurance solely for your land will be ineffective. The insurance only covers the house you reside in. It does not cover a property under construction or the land on which the home is built. Hence, if you only want to purchase insurance to cover land, you may be making a mistake. Property insurance only covers the structure and your personal belongings.
Inclusions in property insurance
Let us take a look at the inclusions in the insurance policy:
Fire- The insurance policy will cover the damages that occurred due to a fire. It would be possible for you to rebuild your home.
Theft and burglary - You will be covered in case of theft where you lose your valuable and precious jewelry.
Electrical breakdown - You can get your electrical appliances covered. This would be of much support in case of an electrical breakdown.
Manmade hazards and natural calamities - You can keep yourself financially secure with the right policy against natural calamities. Your home will also be protected against riots, floods, cyclones, terrorism, malicious acts, and strikes.
Accidental damage - With a home insurance policy, you can get coverage for the sanitary fittings and fixtures in your house.
Alternate accommodation - You will be reimbursed for the shifting expenses, emergency purchases, rent for hotel accommodation or brokerage. These would be provided if your home becomes unfit for living due to losses covered under the policy.
Exclusions in the policy
The following events are not covered under property insurance:
War - Any damage or loss incurred due to war or invasion will not be covered.
Precious collectibles - When you face losses related to damage to stamps, bullions, coins or work of art, it will not be covered under property insurance.
Old content - Anything that is more than 10 years old will not be covered under the policy.
Wilful misconduct - If the damage is wilfully conducted, it will not be covered.
Consequential loss - Any loss that is not the natural result of a breach in the normal course of things will remain uncovered.
Wear and tear - Normal wear and tear will not be covered.
Third party construction loss - Damage to the property due to third party construction is not covered.
Cost of land and under construction - The cost of your land and a property under construction is not covered.
You should go through the inclusions and exclusions of the policy carefully before you purchase an insurance. This would ensure that you are in a better position at the time of claim settlement.
Disclaimer- The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.