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Protecting Your Investment: The Top Benefits of Property Insurance

Blox Social
Posted on
Sep 27, 2023

Investing in real estate, particularly residential property, is often the culmination of a person's emotional aspirations. However, it is also a major financial investment, an asset that is expected to appreciate over time and deliver substantial ROI. This could be through resale or by savings on rent. Real estate investors look to earn by renting or leasing the property. Any damage to the property due to a natural calamity or by any malicious act is a major financial setback. In addition to depreciation in property value, additional repairs may add to the owner's financial woes. Property insurance safeguards against such losses. One of the main benefits of property insurance is that it offers critical support at times when your property is damaged due to a number of causes.

Insurance Against Natural Calamities

Apart from regular wear and tear, natural calamities are the main reason for property damage. Storms and cyclones, floods, earthquakes, and fires can cause untold damage to your property. Even something as simple as a fallen branch could damage your parking area or garage, and repairs can be expensive. Opting for property insurance is not only important but imperative when it comes to protecting your real estate investment. The insurance policy for your property can cover several scenarios, including damage due to natural causes. Yet others, such as electrical fires, may be optional riders or add-ons to your policy.

Protection Against Theft, Vandalism, and Terrorist Attacks

One of the standard clauses added to most property insurance policies is protection against theft, vandalism, or terror attacks. This offers your flat or building coverage in case of damages during protests, rallies, or riots. More importantly, it is an essential aspect of home security and reimburses you for damages suffered during burglaries and thefts. While terror attacks may be considered remote possibilities, most property insurance policies also offer coverage against such a scenario. One of the main benefits of a property insurance policy is being free from having to bear financial losses in case of an incident that damages your property.

Protecting Rental Property 

If you own a residential property and rent or lease it out, you can opt for a landlord insurance policy. This insurance policy provides coverage against damages to the flat or building in case of fire, theft, and vandalism. It also offers protection against tenant damage. Property owners who rent or lease out their property are often concerned about damages to the building or flat caused by tenants, either structurally or due to alterations. One of the benefits of property insurance is that you remain protected against such losses. While landlord policies may include riders that offer protection against loss of rental income, such coverage is rare in India.

Insurance For Your Commercial Property

Property insurance is an essential part of your investment if you own a commercial property that you use for your business or rent out to other businesses. In fact, most domestic and international corporations only sign lease agreements with owners who have property insurance. Protecting your property against damages is important in keeping your business safe, and the premiums can be added to your business expenses. If you run a business from a commercial property you own, you may want to opt for a comprehensive cover that indemnifies against damages to the property and the inventory, machinery, etc.

Frequently Asked Questions About Property Insurance

Are there different policies for commercial and residential properties?

Most insurance companies have different policies for residential homes, flats, apartments, and commercial properties like shops, showrooms, and warehouses. An insurance advisor can help you select the policy best suited for your needs.

How is the insurance amount determined?

The insurance coverage is determined primarily by factors like the type of property, the kind of damage you are seeking coverage for, the value of the property, and the risk involved. When you apply for insurance, the company's underwriters will evaluate these factors and let you know the premium amount if they offer you insurance coverage.

What are the usual exclusions to property insurance?

Most residential and commercial property insurance companies do not offer coverage for the following -

  • Intentional damage by the property owner
  • War or damage due to international conflicts
  • Damage due to substandard repairs undertaken after insuring property
  • Loss of ownership, sale of property, or transfer of property

What are my responsibilities as a property insurance holder?

As a property owner and insurance holder, it is important to read and understand the terms of the policy and comply with all the requirements mentioned in the document. You must take good care of your property and undertake prompt repairs. In case of theft, vandalism, or damage through a third party, you must register an FIR and seek help from law enforcement. You must pay your premiums on time and inform the insurance policy in case of any damage immediately.

Real Estate