Business insurance

Different Types of Property Insurance One Can Use -Vivek Chaturvedi

Every year we hear devastating news of floods, cyclones and other natural disasters wreaking havoc in different parts of India. It not only creates a state of panic among people, but also causes serious damage to properties and impacts human lives.

In May 2021, the damage caused by Cyclone Tauktae in Gujarat was assessed at Rs 10,000 crore. In the same month, Cyclone ‘Yaas’ damaged more than 3 lakh houses in West Bengal, while Cyclone ‘Gulab’ in Andhra Pradesh and Odisha destroyed residential, commercial and industrial buildings and caused havoc. damages worth over Rs 2,000 crore in October 2021. We have also witnessed the floods and torrential rains in many parts of Tamil Nadu, Kerala and Maharashtra which impacted the lives of the poor like rich people. According to the National Disaster Management Authority, about 40 million hectares of land in India is prone to flooding (about 12% of the total land area), and 5,700 km of the 7,516 km long coastline is prone to earthquakes, cyclones and tsunami.

Natural disasters such as cyclones, earthquakes and floods, which were once a rare phenomenon, have now become more frequent than ever. India’s unique geoclimatic conditions make us prone to such natural calamities and we witness property damage worth billions of dollars every year. As the government is taking all measures to ease the hardships of the affected regions, people have also started realizing the importance of getting home insurance to protect their property and valuables against such unforeseen circumstances.

Although the emotional turmoil caused by any calamity can hardly be alleviated, having adequate home insurance could certainly avoid the financial burden borne by families. Here are the different types of property insurance you can consider buying:

Home insurance: Whether you live in a closed corporation or in a freestanding home, home insurance is essential for any homeowner. Despite its geographical location, a dwelling is exposed to various external dangers. Home insurance protects your property against multiple adversities like fires, explosions, and damage caused by a plane crash, among others. A home can also be insured against natural disasters like floods, storms and earthquakes with a home insurance policy. One can also protect the contents of the house by taking out a burglary policy.

There are three types of home insurance plans that are available in the market. In the first plan, the structure of the building, that is to say that only the physical aspect of your dwelling is covered. In the second plan, all the contents of the house, such as your furniture and other personal effects, are covered. However, the same generally do not cover jewelry, but for an additional premium, insurers can also cover jewelry up to a specified amount. The third is a comprehensive plan that covers both the structure of the building and all the contents of your home.

Home is considered to be one of the most valuable investments one makes in one’s lifetime and rebuilding a damaged home can burn a hole in your pocket. So whether you live in northern India which is considered earthquake prone or you live in areas prone to floods and cyclones, opting for home insurance makes extremely logical sense. However, make sure you understand all of the insurer’s exclusions as generally the home insurance product does not cover war, invasion, warlike operations, pollution, contamination, consequential loss or damage or indirect, ionizing radiation, etc.

Commercial property insurance: Damage to commercial property can have a significant impact on businesses as it can suspend operations for a long period of time resulting in huge losses. An estimated 50% of the building damage caused by Cyclone “Gulab” was suffered by industrial and commercial properties. Commercial property insurance generally protects commercial buildings such as offices or free-standing stores against potential damage and loss caused by natural calamities, burglary or fire. This not only helps reduce business risks, but also improves financial stability. These insurance policies generally cover damages and losses caused by fires, explosions and natural disasters such as floods, storms and earthquakes. But keep in mind that these policies usually only cover the physical structure. However, insurers can even cover the contents of your building, including valuables such as cash in a safe or store counter for an additional premium. Whether you own a store or run a small, medium or large business, commercial property insurance can protect you and your business assets against multiple adversities.

Renters Insurance: If you moved to a city for a job, chances are you are staying in rented accommodation. Many renters today live in prime locations and own expensive household items. However, many mistakenly believe that home insurance can only be purchased by those who own property. But many do not know that even a tenant can opt for home insurance by purchasing a tenant’s insurance policy.

This policy protects the tenant’s property in the event of burglary, fire, natural disasters and more. A typical renter’s insurance policy includes liability coverage and personal effects coverage. Although tenants may not be able to prevent certain situations such as burglaries or visitor injuries, this insurance helps minimize the impact.

Generally, renter’s insurance premiums are low and can be easily purchased to protect one’s belongings. In most cases, a homeowner may already have home insurance that covers the structure of the building; it is therefore not necessary to opt for multi-risk home insurance. As a tenant, you can simply opt for rental insurance to take care of your personal belongings inside the house.

Whether you own a home or commercial premises, or whether you are a rented tenant, everyone, regardless of their geographical location, can opt for home insurance to protect their assets and property. Evaluate the benefits of the policy carefully and choose a plan that best suits your needs.

Vivek Chaturvedi is Director of Marketing and Head of Direct Sales, Digit Insurance

Warning: The views expressed in the article above are those of the authors and do not necessarily represent or reflect the views of this publishing house. Unless otherwise indicated, the author writes in a personal capacity. They are not intended and should not be taken to represent the official ideas, attitudes or policies of any agency or institution.