Understanding property insurance: answers to your top questions

If you’re a property owner, you know how important it is to protect your investment. Property insurance, also known as home insurance, can provide coverage against financial losses caused by damage to your property or its contents. However, many people have questions about property insurance and how it works. In this post, we’ll answer some of the top questions about property insurance to help you better understand it.

What does property insurance cover?

When it comes to property insurance, coverage can vary depending on the specific policy. However, most policies cover the building and its contents against a range of perils, including fire, theft, burglary, explosions or implosions, and natural calamities such as lightning, storms, cyclones, floods, and landslides. Coverage may also be provided for the breakdown of domestic appliances, damage to electronic equipment, pedal cycles, and fixed plate glass. It’s important to read the policy wordings carefully to understand what is covered and what is not.

Does property insurance cover third-party liabilities?

Some property insurance policies offer coverage for third-party liabilities. This means that if a third party suffers a bodily injury or damage to their property while on the insured premises, the policy will help the policyholder pay for the liabilities that may arise. For example, the House Holders Package Policy from Bajaj Allianz General Insurance provides third-party liability coverage. However, not all policies offer this coverage, so it’s important to read the policy wordings carefully.

How is the sum insured fixed for property insurance?

The sum insured for property insurance policies is usually fixed via two methods: reinstatement value basis and market value basis. In the reinstatement value process, the maximum amount the insurer pays depends on the cost of replacement of the damaged item, subject to the sum insured ceiling. Depreciation is not taken into consideration here. In the market value method, the maximum amount to be paid is calculated on the market value of the item, after deducting the depreciation on the asset based on its age. Other methods, such as agreed value basis and new-for-old basis, can also be used.

Are my belongings covered if I take them out of the insured premises?

In most cases, items are only covered if they are stored or present within the insured premises. However, some policies may offer coverage for items that are temporarily taken out of the insured premises. For example, the House Holders Package policy covers jewellery, but only if it is damaged within the insured property. If damage occurs to the insured jewellery while the policyholder (or another member of the house) is carrying it somewhere or travelling with it, then the insurance company may not be liable. It’s important to read the policy wordings carefully to understand what is covered and what is not.

What is the claim process for property insurance?

To make a claim on a property insurance policy, you need to inform the insurer about the event that has occurred. After that, the claim will be verified and taken to the claims department, who will appoint a surveyor. The surveyor will take a detailed look into the claim and create a report. The claim will be processed accordingly within some days. It’s important to provide all necessary documents and other information as requested by the surveyor to ensure a smooth claims process.

Who can buy property insurance?

Any individual who wishes to insure their property and its contents can opt for a property insurance policy. To be eligible to buy a property insurance policy, you must have an insurable interest in the property. This means that you must stand to lose financially if the property suffers damages. You must also be honest about the property and the contents you wish to insure. If the insurer finds out that you have been dishonest about the valuation of your property, your claim may be affected.

Property insurance is an important investment for any property owner. It provides coverage against financial losses caused by damage to your property or its contents. By understanding what property insurance covers and how it works, you can make an informed decision and protect your property and its contents. Remember to read the policy wordings carefully to understand what is covered and what is not, and don’t hesitate to reach out to your insurer with any questions or concerns.

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