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Cars, two-wheelers, cycles, and even your neighbor’s puppy can be insured, but did you know that entire buildings can also be insured? Yes, entire buildings irrespective of their size can be extended insurance coverage.
This article will attempt to explain the concept of building insurance, and at the same time highlight some of the most important topics concerning building insurance such as importance of building insurance, types, scope, benefits, and more.
We will extensively talk on the following topics:
A building insurance policy is a contract between the owner of the building and the insurance company. This contract is for a specific period of time and a specific amount (Premium). A building insurance policy provides coverage to the policyholder in the event that the insured building is damaged during the contract term.
A building is an expensive asset and should be insured. Uninsured buildings can be a cause of massive financial pain to the owner of the building. Let us highlight some of the most important benefits of building insurance below:
Inclusions and exclusions depend of the type of building insurance policy as well as the insurance company issuing the policy. That being said, there are certain inclusions and exclusions that are generally shared across policies and insurance companies, they are:
Damage caused due to willful negligence
Theft / Burglary
Damage caused intentionally
Natural disasters like floods, earthquakes, cyclones and more
Manmade disasters like terrorist attacks and riots
General wear and tear of the property
Accidental damage caused to the property
Precious items like gold, jewelry, art, etc that is damaged
Electrical fires and other electrical damage
Damage resulting due to war
Alternative accommodation expenses if necessary
Third party construction loss
Keep in mind that actual inclusions and exclusions will need to verified and checked with the insurance company.
Building insurance can be bought by the following parties:
1.) Small and large businesses: Both, small as well as large businesses can leverage building insurance to protect themselves against potential losses. It is considered extremely cognizant to ensure that your building is insured and covered.
Businesses that can be covered under building insurance are:
2.) Individual Owners: Not only large and small businesses, even individual owners that own buildings need to strongly consider buying building insurance as the costs of servicing substantial damages to a building could be astronomical.
3.) People who rent: Certain insurance companies even sell building insurance policies to renters that rent out entire buildings.
Insurance companies will generally offer flexible building insurance plans that cover all bases.
The policyholder will need a pay a rate of premium to insure his building, but how is this premium calculated? Let us have a closer look at how an insurance company determines the rate of premium.
This article is written by Team InsuranceLiya.com, an independent website that writes about insurance, finance, health, and more. Our writers have a wealth of knowledge, experience, and degrees in the fields of insurance, finance, economics, and beyond.