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What Is Property Insurance?

IndianMoney.com Research Team | Posted On Thursday, January 24,2019, 11:22 AM

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What Is Property Insurance?

 

 

What Is Property Insurance?

As the name suggests property insurance provides insurance cover to goods and physical equipment/assets and compensates for loss in case of any damage of the property or contents. Property insurance can be availed by households, business and manufacturing units. It is a comprehensive policy that offers a combination of policies that include homeowner’s policy, renter’s policy, flood insurance, shopkeeper’s policy, office package policy, and earthquake insurance under a single policy.

It covers the risk and the damages caused by fire, theft, wind, smoke, snow, lightning and so on. The property insurance excludes any damage that is caused by water like flooding, water seepage, stagnant water, tsunamis, cyclones, and so on. Some of the property insurance covers also exclude the losses due to earthquakes and acts of war.

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SEE ALSO: Home Insurance Claim

What Is Property Insurance?

Types of property insurance:

Listed below are some of the common types of property insurance:

  • Fire insurance: it is a type of insurance that provides cover to households, commercial units or manufacturing units in case a fire breaks out. The cover under this policy includes manufacturing units, buildings, goods, raw materials /finished goods, machines and equipment.
  • Burglary insurance: this type of policy insures households or manufacturing units in case a burglary/theft takes place. It compensates for the loss of assets within business premises.  The policy covers jewelry, securities and assets stored inside the premises of the insured property.
  • Marine cargo insurance: Marine cargo insurance policy is a type of property insurance that insures property while in transit, against loss or damage arising from perils associated with navigation through sea, air or land routes and inland waterways.
  • All risk insurance: All-Risk Insurance policy is an insurance plan that provides coverage and protection from all risks and perils that can damage your home or contents and personal property.
  • Special perils policy: this is an insurance contract which safeguards the insured property against losses or damages caused by natural disasters like fire, earthquake, lightning, storm and manmade perils like riots, strike and so on.

Benefits of Property Insurance:

There can be endless benefits in purchasing property insurance. Listed below are some of them:

  • It provides coverage under a single policy and compensates for the loss of contents as well as any damage to structure.
  • In case of physical properties like a building or shops, the property insurance provides coverage against natural perils and man-made damages.
  • Property insurance also compensates for the loss, damage or theft of machinery or equipment vital for business
  • In case of theft or fire, property insurance compensates for the loss, helping the owner recover from the damage.
  • A business is likely to incur a huge loss in case the goods are lost in transit. Property insurance covers risks posed by goods in transit.
  • Property insurance also covers homes. It compensates the damage caused to residences by natural disasters or manmade perils and helps families quickly rebuild their homes. Families can rely on a property insurance plan in case of unforeseen events causing damage or loss to their residences.

SEE ALSO: Home Insurance Policy: Which Is Best?

Inclusions of property insurance policy:

Property insurance policy compensates the loss incurred from natural and manmade disasters and covers both the structure and the contents. Given below are the inclusions on a property insurance policy:

  • Earthquake cover: the policy covers the damage caused to the insured property due to an earthquake.  Many policies only cover properties against earthquake and not against flooding that takes place due to earthquakes.
  • Theft cover: Under the property insurance, the contents of the insured property are also covered against theft or burglary. The coverage includes silver items, jewelry and other valuables.
  • Fire and perils cover: This protects the property from fire, lightning, riots, aircraft damage, storm, cyclone, floods, missile testing operations and so on.

SEE ALSO: Term Insurance for Home Loan

Exclusions of property insurance policy:

Like every policy, the property insurance plan also has a list of exclusions. The exclusions are not covered by the policy and so the policy holder will not receive any compensation for loss or damage caused due to the following reasons:

  • Damage caused by wear and tear and depreciation of structure.
  • Loss of cash.
  • Loss or damage caused by war, invasion and acts of terrorism.
  • Loss or damage caused by nuclear war.
  • Loss, destruction or damage caused to any electronic equipment due to over-running or excessive pressure.

FAQS

What are the other types of property insurance available?

Property insurance is a comprehensive policy that covers various insurances under a single plan.  The other type of insurance available under this policy are marine-hull, marine cargo insurance, standard fire and special perils policy, burglary insurance, engineering insurance policy, office insurance, construction insurance, factory and warehouse insurance, art insurance and so on.

Who can take a Marine Cargo Insurance Policy?

Marine Insurance Policy is one of the best cargo insurance covers, which will help protect valuable cargo anywhere in the world. Property insurance policy will provide full cover against damage or loss to cargo sent by sea, road, rail or air. This policy must be availed by sellers of goods or transporters who send consignments or goods through ships, airlines or land routes.

What is not covered in a Burglary Insurance Policy?

The Burglar insurance Policy will not pay for loss/damage of the following:

  • Goods held in trust or commission, jewellery, curios, title deeds, business books unless specifically insured.
  • By abstraction from a safe using a key or duplicate key, unless it is obtained by violence or threat.
  • Due to shop lifting, acts involving you/your family members/ your employees.
  • Due to War perils, Riot and Strike (covered by payment of additional premium), Acts of God, Nuclear perils. 

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