Building Insurance 2025

Types of Coverages in Building Insurance 

Most insurance companies offer building insurance policies. Primarily, there are 3 types of building insurance policies available to customers. They are as follows: 

1. Insurance coverage for the building structure or contents. 

1. Insurance coverage for the building structure and contents. 

1. Insurance coverage for the building structure, contents, and valuables in the house, including cash and jewellery. 

What is covered in Building Insurance? 

Building insurance covers many expenses related to a building, whether it is caused by accidents or other unexpected incidents. Here is a list of things that are covered under a building insurance policy: 

1. Theft and Burglary: Building insurance covers loss caused by theft and burglary. It covers not just the building, but also the expensive items kept inside the house, including jewellery, home appliances, and cash. 

1. Fire Occurrences: Any damage or financial loss caused to a building due to fire is covered in building insurance. 

1. Natural Disasters: Protection against natural disasters is a major feature of building insurance. Floods, cyclones, and earthquakes are included in this category. All damages caused by natural disasters are fully covered in building insurance. 

1. Electrical Breakdown: Damages caused by electrical breakdown are covered under building insurance plans. Electronic devices destroyed due to sudden high-power flow also come under this category. 

1. Man-made Disasters: Damages caused by man-made disasters are also covered in building insurance, along with the listed natural disasters. This category includes terrorist attacks, riots, vandalism, etc. 

1. Accidental Damages: This refers to damages caused to a property unintentionally. This includes accidental damage to fixtures and sanitary settings in a building. 

1. Alternate Accommodation: If the insured house is damaged due to covered events, the insurance company will provide alternate housing to them. This facility is available till the house is fully restored. 

What is Not Covered in Building Insurance? 

It is essential to know what is not covered in a building insurance policy when insuring your building. They are: 

1. Wilful Act: Any damage caused by intentional acts will not be covered in building insurance. 

1. Damage in War: Damage caused to a building in wars or foreign invasions will not be covered. This category also includes damages caused by civil unrest and rebellions. 

1. Old Items and Collectibles: If things that you own, which are older than 10 years get damaged, this will not fall under the cover of the policy. Items such as antique collectibles, like stamps and coins will not be compensated if they are stolen or destroyed. 

1. Damage by Third-Party Construction: If your building gets damaged during construction by a third-party, the damages will not be compensated. 

1. Consequential Loss: This refers to the type of damages or loss that happens not because of direct impact. A building policy will not cover such damages. 

1. Cost of Land: The price of the land on which the property is located will not be covered. 

1. Wear and Tear: Building insurance policies will not cover damages caused by wear and tear during renovation or maintenance of the building. 

1. Properties Under Construction: Properties under construction are not eligible for compensation in building insurance. 

Eligibility Criteria for Building Insurance

To purchase a building insurance plan, customers must meet the eligibility criteria. They are: 

1. To purchase building insurance, the applicant must be a homeowner. Anyone owning and residing in a house for years or who has just moved into a new property will be able to purchase a building insurance policy. 

1. People residing in rented properties can also buy customised building insurance policies to cover the contents of the house. 

Building Insurance Calculation

When buying a building insurance plan, it is essential to understand what factors could influence your insurance premium. The key factors that influence the premium of a building insurance plan are as follows: 

1. Type of Building: The most important factor to consider when buying a building insurance plan is the type of property that you own. The premium you will receive for a bungalow is different from the amount for a flat. The premium for a bungalow is much higher than for a flat in a residential area. 

1. Area: The area that your property lies in plays a major role in fixing your insurance premium. If you live in an area more prone to natural disasters, such as floods, the premium will be higher. 

1. Age: The age of the building also plays a crucial role in determining your building insurance premium rate. Newer buildings would receive higher premiums while older buildings would receive lower rates. 

1. Safety Features: If your house has safety installations such as CCTV surveillance and water sprinklers to prevent fire incidents, the insurance premium will be lower.