The need for property insurance in today’s scenario


The geographical location of the country makes it vulnerable to disasters. In fact, more than 68% of the country is vulnerable to earthquakes, 15% is vulnerable to floods, 10% is vulnerable to cyclones, and the entire hilly region is prone to landslides. Recent major disasters cover all parts of the country including floods in Chennai, West Bengal, Bihar, North East and Kerala, landslides in Kedarnath, Uttarakhand and Himachal, cyclones in Odisha and Andhra Pradesh , earthquakes in Gujarat, Maharashtra, Assam and J&K . In these disasters, assets worth billions of dollars have been lost and, in some cases, progress worth decades has been reversed.

With the rise of global warming and changes in weather patterns, vulnerable areas are only expanding. In recent floods, waterlogging has been recorded in areas beyond the predicted regions. Similarly, extreme rainfall and cyclones are occurring in areas not affected to date. The zone of vulnerability is only increasing and measures to mitigate the damage, caused by disasters, must be initiated at the earliest.

Insurance companies ensure the security of goods in an environment of increasing unpredictability. Thus, property insurance today constitutes an important part of insurance policies. Below are some of the main types of property insurance that consumers should take advantage of.

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Homeowners Insurance

It is one of the most purchased types of property insurance in the country, which insures the home owner against financial loss, in the event of an untoward incident. It covers the structure of the house and the contents of the house such as appliances, jewelry and furniture, depending on the type of coverage chosen. For the precious asset that is a house, built on years of hard work, this insurance is not a luxury but a necessity. There are three basic levels of coverage, based on insurer requirements, actual cash value, replacement cost, and extended replacement cost. The level of customization offered by insurers is another added benefit that owners should definitely take advantage of.

Tenant insurance

If one is renting a property, one of the smartest things to do is to get tenants insurance. This protects personal property, in addition to protecting the renter from liability claims, it also provides an optional clause for additional living expenses. The scenario of a small negligent act by a neighbor or even a delivery agent of leaving the security gate open or leaving a lit cigarette butt can trigger a disastrous chain of events. Along with the threat of disaster loss, the threat of theft continues to grow. In fact, the value of one’s possessions is realized only when they are lost or damaged. Therefore, to avoid regrets, it is always a good idea to insure yourself, especially when the premium is as low as in the case of tenants insurance.

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Commercial property insurance

As the name suggests, insurance protects the physical assets of businesses. Two other insurances are usually combined with commercial property insurance – general liability and business interruption insurance, to form a more comprehensive insurance. From physical damage to infrastructure to employee liability and theft, a business is vulnerable at every stage, which is why a savvy businessperson must know how to protect their assets and reduce the creation of liabilities. Based on the risk for business, commercial property insurance is a must.

Natural Disaster Insurance

This is part of all other insurance and is usually provided as part of comprehensive insurance. The threat of cyclones, floods, landslides or earthquakes can destroy everything in their path. This type of insurance is an absolute must and should always be included. The reader would be well advised to read the insurance document carefully to understand all the conditions for which one is insured.

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Fire insurance

The high cost of land has inevitably meant that every inch of available space is developed. This high building density coupled with inadequate emergency response infrastructure means that fires are usually not brought under control early, leading to heavy casualties. The threat is growing day by day, especially in cities where new heavy-duty electrical appliances are being installed daily. This insurance also covers accidental fire and related perils like lightning, explosions or implosions, making the inclusion of fire insurance in property coverage a no-brainer.

Property insurance is an essential inclusion in today’s uncertain world. Unplanned growth coupled with global warming is leading to an increasing number of incidents that threaten to undo decades of hard work. In the uncertain world, the only degree of certainty offered by insurance must be used. The increasing flexibility in choosing the insurance package is an added advantage, thanks to the increasing competition in the market.

(By Honeyy Katiyal, Founder of Investors Clinic)



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