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Importance of a Building Insurance Policy

Sep 13, 2023


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Importance of a Building Insurance Policy

What Is the Importance of a Building Insurance Policy?

Building Insurance is essentially a property insurance policy that provides reimbursement if the building suffers from any damage due to fire, theft, or other natural calamities. A Building Insurance Policy is usually purchased by a Housing Society and hence it is also known as a Housing Society Insurance Policy.

So, a building insurance policy is essentially a fire insurance policy which covers the building structure from any damage on account of fire and related perils. A Building Insurance Policy can also be extended to cover the contents inside the home as well.

IRDA has come out with a standard insurance policy known as Bharat Griha Raksha to cover individual homes, residential buildings, housing societies etc. This article will explain the importance of an insurance policy for a housing society.

What are the Coverages under a Building Insurance Policy?

Bharat Griha Raksha is a standard insurance policy offered by many insurance companies, which gives insurance cover to the building structure and the contents.

Bharat Griha Raksha Insurance Policy offers following types of covers:

Building Structure Cover provides coverage for the building structure. The Building Structure also includes additional structures that are on the same site such as garages, parking spaces, compound walls, fences, gates, retaining walls, internal roads, septic tanks, fixed water storage units, tanks, solar panels, wind turbines etc.

The insurance will pay for any damage caused to the building structure on account of damage due to fire and associated perils.

Contents Cover provides coverage for the articles or things inside the home such as furniture, electronic items, antennas, solar panels, water storage equipment, kitchen equipment, electrical equipment, clothing, apparel items etc.

The Insured can opt for a Combined cover for structure and contents as well.

The Bharat Griha Raksha Policy has an inbuilt cover for the following:

  1. Architects, Surveyor, Consulting Engineer Fees: The Housing Society Insurance Policy will pay upto 5% of the Claim Amount for reasonable fees of Architects, Surveyor, Consulting Engineers.
  2. Removal of Debris: The Housing Society Insurance Policy will pay upto 2% of the Claim Amount for Removal of Debris
  3. Loss of Rent Cover will pay the Insured Party the rent lost due to damage to the Insured Building on account of an Insured Peril.
  4. Rent for Alternative Accommodation Cover under the Bharat Griha Raksha Insurance Policy will pay the Insured Party the difference in rent if the Insured is living in the home as a tenant and he has to shift to an alternative accommodation because the home that he was living in got damaged due to an Insured Peril. The Rent paid under this cover will be paid for a similar accommodation and not for a superior accommodation.

What are the optional Add-On Covers under a Building Insurance Policy?

The Bharat Griha Raksha Insurance Policy offers 2 Optional Add-On Covers as listed below:

  • Valuable Contents Cover consists of items such as jewelry, paintings, works of art, silverware, antique items and other similar items whose value cannot be readily ascertained. These items can be insured on an Agreed Value Basis under the Valuable Contents Cover provided that a valuation certificate is provided
  • Personal Accident Cover under the Bharat Griha Raksha Policy covers the Insured’s life or spouse’s life in the event of an accidental death due to an Insured Peril that caused damage to the Building Structure or the Contents of the insured property. The Sum Insured under the Personal Accident Cover of Bharat Griha Raksha Policy is Rs5 lakh per person

What are the Perils covered under a Building Insurance Policy?

The Perils covered are the same as a Standard Fire and Special Perils Insurance Policy:

  1. Fire
  2. Explosion or Implosion
  3. Lightning
  4. Earthquakes
  5. Storm, Cyclone, Typhoon, Tempest, Flood, Inundation etc
  6. Subsidence, Landslide, Rockslide
  7. Bush Fire, Forest Fire, Jungle Fire
  8. Impact Damage or Damage Caused due to collision caused by any external physical object
  9. Missile Testing Operations
  10. Riot, Strikes, Malicious Damage
  11. Acts of Terrorism
  12. Bursting or Overflowing of Watertanks, Apparatus or Pipes
  13. Leakage from Automatic Sprinkler Locations
  14. Theft within 7 days from the occurrence of and proximately caused

What are the exclusions under a Building Insurance Policy?

The major exclusions under a Building Insurance Policy are as follows:

  1. A Building Insurance Policy will not pay for any losses or damage due to willful or intentional act or omission by the Insured Party
  2. Cost or Expenses incurred in Claim Preparation are excluded
  3. Loss of Insured Property which is missing or whose disappearance cannot be explained

What Are the Advantages of Building Insurance Policy?

  1. The prime advantage of a Housing Society Insurance Policy is that it provides cover to both, the main building structure and any peripheral structures like garages, sheds, fences, etc. from fire, theft, and other natural calamities.
  2. A Building Insurance Policy also provide expenses towards rent for alternative accommodation since the Insured Person would have to shift to alternative premises until the damage building or home is repaired
  3. A Housing Society Insurance Policy can be combined with a Commercial General Liability Insurance Policy to provide coverage for legal expenses and compensatory damages for any form of Bodily Injury or Property Damage suffered by third parties

What Are the Risks of Not Buying a Building Insurance Policy?

If you do not have building insurance policy, in the event of a misfortune, you would incur a major loss in either reconstructing the building or repairing the damages caused to the building.

A major misconception is that a building insurance policy is expensive. However, that is not true, and you can avail a building insurance policy for very affordable premiums.

If someone visiting your building is injured at your premises, liability coverage helps insure these expenses. From medical bills to legal defense fees, you would incur these additional expenses if you do not have a building insurance policy.

Why Buy Your Building Insurance Policy from Qian?

Qian has tie-ups with top insurance companies in India. Our experienced team can assist you in availing comprehensive coverages at affordable premiums for your housing society insurance policy.

So whether you are looking to purchase a building insurance policy for your residential building, commercial building or a home insurance policy for your individual home, our team at Qian can provide appropriate insurance solutions. Qian also has a 24/7 expert claims assistance team who will assist you with your claims.