Understanding Property Insurance

Most Indian homes and business premises are uninsured or badly underinsured, usually because the premium is so low that nobody bothers to check what it covers.

Structure and contents are different things

A policy on the structure rebuilds the building. A contents policy replaces what is inside it. Housing societies typically insure the structure only; the contents of your flat are your responsibility.

Underinsurance and average

If you insure a property for less than its reconstruction cost, most policies apply the "condition of average" and pay claims proportionately — even partial ones. Insure at rebuilding cost, not market value.

Business premises need more

A shop or factory policy should extend to stock, machinery breakdown, electronic equipment and business interruption. The interruption cover is often what actually saves the business.

What is usually excluded

Wear and tear, gradual damage, unoccupied-property losses beyond a stated period, and in many policies, damage from seepage. Read the exclusions before you need them.

Before you decide

Everything above is general. What is right for you depends on what you are protecting, what you already hold, and what you can sustain. That is a fifteen-minute conversation, and it is free.