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What is real estate sector insurance?
Real estate sector insurance provides coverage for property owners who rent or lease their properties that could be used for office spaces or any commercial purpose. Real estate insurance covers the loss or damage to properties leased or rented out due to natural or man-made perils. The real estate owners would have insurance interest in the property; therefore, real estate insurance would apply only to them. The lessee who rents the real estate property can take insurance only for the items in which they have insurance interest. Real estate insurance provides the reinstatement value of the property in case of loss or damage to the property due to an insured peril acting at the time of the incident.
Types of real estate insurance policies in India:
There are 2 types of real estate insurance policies in India which are mentioned in detail below:-
Home & Shop Insurance (Bharat Griha Raksha):
Home insurance covers the real estate owner’s home, either rented or owned and used by the insured. Home insurance covers the financial loss or damage to the insured’s property in case of an insured event acting at the time of the loss. It comes under the standard fire and special perils policy designed to cover the homes. The sum insured would be the value selected and mutually agreed upon between the insured and the insurance company.
- Coverage & Highlights: Home insurance covers the below perils:
- Fire– Damage caused due to Fire and allied perils.
- Lightning– Damages caused to the property due to lightning such as cracks in the building etc.
- Explosions/ Implosion: Damages caused to the insured property due to explosion or implosion of any of the apparatus or vessels, water boilers etc due to the excessive pressure within the vessel.
- Aircraft Damage– Damage caused to the insured property due to parts dropped from an Aircraft or aircraft collision or any other aerial devices with the insured property.
- Riot, Strike & Malicious damage (RSMD)– Damage resulting from riots, strike and intentional damage are covered.
- Storm, Typhoon, Flood & Inundation (STFI)– Damage caused to the insured property due to storm, flood, typhoons or inundation is covered. The above perils would increase the water level, damaging the property in one way or another. Earthquakes and volcanic eruptions can be covered on payment of an additional premium.
- Impact Damage– Damage caused to the insured property due to an impact by any rail or road vehicles or animals. Impact is defined as the large force acting for a short period of time.
- Subsidence, Landslide/ Rockslide– Damage to the insured’s property because of the property’s sinking or the collapse of the mass of Earth from the cliff or mountain.
- Damage was caused due to the Bursting and overflowing of water tanks, apparatus and pipes to the insured property.
- Damage was caused due to parts of a missile hitting the home as a part of Missile testing operations.
- Damage to property caused by leakage from sprinkler installation.
- Property damage as a result of an incident like the Bush Fire.
- Exclusions: There are certain exclusions under the home insurance policy which are mentioned below:-
- Property damage or destruction due to its own fermentation or natural heating and spontaneous combustion.
- The destruction or damage caused by any drying or heating process.
- The home is destroyed or burned to the ground on the order by Public Authority.
- Damage caused to the home due to industrial boilers or any other industrial equipment.
- Damage caused due to the home due to demolition, repair or structural alterations as a part of the renovations.
- River or coastal erosion settlement or movement of built up ground, design flaws or poor workmanship or making use of faulty raw materials.
- Conflict and the dangers of allied conflict.
- Steps to Buy: The real estate home insurance policy can be purchased in three easy steps as mentioned below:
Step 1: The first step is to visit the webpage of Ethika insurance broking and click on the get quote option. This will redirect you to enter the basic details after which you would receive a call from the home insurance experts of Ethika insurance.
Step 2: The next step is to give the details of your home you are willing to insure. Details of the insured such as contact details, name, occupation etc. Details of the property such as Address of the property, Reinstatement value of the property/Sum insured, number of years of insurance required etc. should be given to generate the best quote.
Step 3: The next step is to choose between the long term home insurance and short term home insurance policy. Long term fire insurance is when the insurance period is for more than 1 year and can extend up to 10 years. Get the best home insurance quote now.
FAQs:
Can tenants take home/shop building insurance?
Tenants can only take home insurance if they have an insurable interest. Insurance interest occurs when an insured person receives some financial benefit from the property, and any damage to the property would cause a loss for the insured person.
Is it mandatory to buy real estate home/shop insurance?
No. It is not mandatory to buy real estate home insurance. But it is advisable to talk to our agent once and then decide to buy a home insurance policy.
How is premium calculated in home/shop insurance?
The premium in home insurance is calculated based on the area of the insured property and the number of perils required to be covered under the plan. Higher the area and the coverage, higher would be the premium.
How to decide the sum insured in home/shop insurance?
The sum insured should be decided keeping in mind the reinstatement value or reconstruction value of the property at the time of damage in the future. Inflation components should also be taken into consideration while deciding the sum insured.
Is inspection mandatory for home/ shop insurance?
No. inspection is not mandatory to avail a home insurance policy. Please talk to our real estate home and shop insurance agent to understand the process of purchasing a home or shop insurance policy.
Lessee’s / Renter’s property Insurance:
Renter’s property insurance covers the loss or damage to the lessee’s property and provides financial compensation as per the market value or the reinstatement value. If the property is valued at market value, the depreciation of properties value will be taken into account.
- Coverage & Highlights:
- Fire, explosion & implosions, Lightning.
- STFI, RSMD, Earthquake and Volcanic eruption.
- Bursting of overhand tanks, apparatus and leakage of sprinkler installation.
- Theft and Burglary.
- Damage to the portable electronic items such as phone, laptop etc.
- Accidental damage due to external accidents or during transit.
- Mechanical or electrical breakdown of the insured equipment.
- Personal accident insurance for owners and maids.
- Expenses for alternate accommodation.
- Loss of Jewelry, Gold, Silver items.
- Exclusions:
- Damage caused to the home due to industrial boilers or any other industrial equipment.
- Damage caused due to the home due to demolition, repair or structural alterations as a part of the renovations.
- Coastal or river erosion, Settlement or movement of made up ground, defective design or defective workmanship or use of defective raw materials.
- War and allied perils.
- Damage or destruction to the property due to its own fermentation or natural heating and spontaneous combustion.
- Damage or destruction caused due to any heating or drying process.
- Burning or destroying the home due to the orders of the Public Authority.
- Steps to Buy:
Step 1: The first step is to visit the webpage of Ethika insurance broking and click on the get quote option. This will redirect you to enter the basic details after which you would receive a call from the renter’s insurance experts of Ethika insurance.
Step 2: The next step is to give the details of your home you are willing to insure. Details of the insured such as contact details, name, occupation etc, Details of the property such as Address of the property, Market value /Sum insured, number of years of insurance required etc. should be given to generate the best quote.
Step 3: The next step is to make the payment and get the renter’s home insurance policy. Get the best home insurance quote now.
FAQs:
What is the Market Value basis?
Market value is the product’s value in the market at the time of the damage. Insurance companies pay the claim based on the market value less depreciation for the time period. Certain items such as fine art, jewelry etc can be insured on an agreed value basis where the sum insured would be mutually agreed between the insurance company and the insured.
What is the policy period in Renter’s Home Insurance?
The Renter’s home insurance, also known as Home content’s insurance, is usually given for 1 year, after which the policy should be renewed mentioning the revised sum insured details.
How is sum insured calculated in Renter’s Home Insurance?
The amount covered under the policy for home contents is calculated on the item’s market price or the price at which you purchased the item. The sum insured should be declared when taking the policy and the claim would be settled on the market value basis less the depreciation for the time lapsed.
Top Real Estate Insurance policies in India in 2023:
| Real Estate Insurance Policy | ICICI Lombard | HDFC ERGO | Bajaj Allianz | National Insurance |
| Name of the policy | ICICI Bharat Griha Raksha Policy | HDFC ERGO Bharat Griha Raksha Policy | Bajaj Allianz Bharat Griha Raksha Policy | National Insurance Bharat Griha Raksha Policy |
| Fire, Lightning, Explosion & Implosion | Covered | Covered | Covered | Covered |
| STFI & RSMD | Covered | Covered | Covered | Covered |
| Earthquake & Volcano eruption | Add-on | Add-on | Add-on | Add-on |
| Terrorism | Covered | Covered | Covered | Covered |
| Bursting & Leakage of sprinkler installation | Covered | Covered | Covered | Covered |
| Bush Fire | Covered | Covered | Covered | Covered |
| Forest Fire | Add-on | Add-on | Add-on | Add-on |
| Public Liability | Add-on | Add-on | Covered as an add-on up to Rs. 5 Lakhs. | Covered as an add-on up to Rs. 5 Lakhs. |
| Alternative accommodation rent | Add-on | Add-on | Add-on | Add-on |
| Architect, Surveyor and Consultant engineer fees | Covered up to 5% of the claim amount. | Covered up to 5% of the claim amount. | Covered up to 5% of the claim amount. | Covered up to 5% of the claim amount. |
| Debris removal fees | Covered up to 2% of the claim amount. | Covered up to 2% of the claim amount. | Covered up to 2% of the claim amount. | Covered up to 2% of the claim amount. |
| Under insurance | Waived off | Waived off | Waived off | Waived off |
| Auto escalation of sum insured | Covered | Covered | Covered | Covered |
| Electrical Breakdown | Add-on | Add-on | Add-on | Add-on |
| Hotel Stay Cover | Add-on | Add-on | Add-on | Add-on |
| Portable equipment cover | Add-on | Add-on | Add-on | Add-on |
| Jewelry and Valuables | Add-on | Add-on | Add-on | Add-on |
| Pedal cycle | Add-on | Add-on | Add-on | Add-on |
Top real estate insurance plans in terms of claim settlement ratio:
According to the insurance regulatory and development authority’s website, the insurance plans that cover real estate have the highest settlement rate. Only Some claims are reported each year under the real estate home or shop insurance plans, which would be settled immediately upon submission of the relevant documents.
For more details on the claim settlement ratio of real estate home or shop insurance please visit our website Ethika insurance broking.
