Property and Equipment Insurance

You spend your hard-earned money to buy property and assets, just to call it your own!, But, what if one morning you woke up with news saying your property caught fire? You would want it to be a bad dream, right? (touchwood!).
Life can take unexpected turns and you don’t know what’s in the future, so only buying a property isn’t enough. You need to secure your property from all kinds of unforeseen events. For this, you need property and equipment insurance.
Here’s a quick guide on Property and Equipment insurance.

What Exactly is Property and Equipment insurance?

You call it property and equipment insurance/property insurance/asset protection insurance, or commercial insurance- it’s all the same. When we say property and equipment insurance, it includes coverage against damage or loss of physical assets, encompassing commercial buildings, homes, equipment, machinery, and inventory. Property and equipment insurance will help the owner eliminate financial loss, which might occur due to damage caused to the property by natural calamities, theft, fire, damage etc.
In simple terms, if your building, tools, or intellectual property is damaged or destroyed, a property and equipment policy will save you from great expenses.

Types of Property and Equipment insurance

It must be clear from the name, flood insurance offers insurance coverage for damage or loss because flooding occurs due to natural disasters or other events.

This type of insurance provides coverage for other additional expenses a property owner or business might incur in order to continue its operations after a covered loss.

As named, this insurance type provides coverage for damage or loss because of the breakdown of mechanical, electrical, or technological equipment that a property depends on for its operations

This insurance niche provides coverage for lost income and extra expenses occurred as a result of covered reasons such as fire or natural disaster, that disrupts normal business operations.

This type of insurance covers commercial properties including buildings, equipment, inventory, and furniture against damage or loss caused due to covered perils such as fire, theft, vandalism, and natural disasters.

As mentioned, this insurance offers coverage for damage or loss occurring from earthquakes, which are of significant risk in some areas.

Why You Need Property and Equipment Insurance?

It is necessary to buy property and equipment insurance to avoid all sorts of financial burdens that you face due to damage to your property and property assets. The various reasons to get property and equipment insurance right today are:

Protection Against Damage or Loss: property and equipment insurance offers financial protection against damage or loss of a physical asset such as equipment, inventory, and supplies. This insurance coverage will help a property owner recover quickly and avoid financial losses that occur due to unforeseen events such as fire, theft, or natural calamities.
Business Continuity: Property insurance will keep your business running by covering the cost of repairs, equipment replacement, and temporary relocation expenditures. With this, you will be assured that your business can continue to serve clients and generate income.
Peace of Mind: Knowing that your property and assets are protected, will give you peace of mind and let you focus on other stuff without worrying about potential losses or unexpected expenses.
Improved Credit Worthiness: By having property and asset insurance coverage you can enhance your creditworthiness in the eyes of the lenders and investors. It’s because insurance coverage signifies that a business is prepared for unexpected events and has taken steps to protect its assets. With this, a business secures better financing terms and attracts more investments.

What Are The Factors Impacting Property and Equipment Insurance?

There are some factors that can impact your property and equipment insurance such as:

Location: If your property is situated in a flood/earthquake-prone locality then your insurance premium will be on a slightly higher side.
Age/Structure of Building: If your property is old and has few constructive challenges then your premium will be high.
Amount of Belongings it Contains: If your property has some valuable assets which you want to ensure then in that case the premium will depend on the value of the asset.
Total Value of the Property: The total value of your property matters the most at the time of deciding on a premium. If your property’s value is high then your premium will be high and vice versa. You can say, it’s the market value of your property.

What Will a Property and Equipment Policy Cover?

Fire can decimate your dream property. Thus, property and asset insurance covers the damage caused due to fires.

Thieves can run away with your expensive valuables and precious jewellery. But with insurance, you can rest easy that it’s all got covered.

You can’t imagine your life without electrical equipment. Make sure that all your equipment gets covered in the event of an emergency.

If your property gets damaged due to natural calamities like floods, earthquakes, cyclones etc. Don’t worry it can get all covered. Also, you can secure against riots, terrorism, and other man-made hazards.

With property and equipment insurance you can also get coverage on expensive equipment if any kind of accidental damage occurs.

What is Not Covered in the Policy?

Understanding what is not covered in the policy is also very useful. It will help you make informed decisions while filing for the claim. Below are the points that are usually not covered in the Property and equipment policy:

Your insurance will not cover the consequential loss that has not occurred naturally.
Any damage that has occurred to your property because of third-party construction.
The insurance will also not cover the usual maintenance and renovation.
An under-construction property will not get coverage.
Loss or damage that occurred due to events like war, invasion, hostile, and nuclear attack is also not covered under property and equipment insurance.

How To File a Claim?

For intimating a claim for property insurance, you can follow the below-given steps :

Inform the insurer immediately about the damage caused to your property/asset with a rough estimate of the damaged valuables. This is done by filling out a duly signed claim form. (Dont do the repair on your own at this stage)
A surveyor will be appointed to inspect the damage and will provide a report.
Now, you have to submit the original documents required by the insurance company.
After getting a head’s up from the insurance company, you can begin your repair work and claim for expenses within the limits of the total sum assured.
There you will have to share the original bills, according to that the net liability will be computed and your bill will be settled.

Documents Required for Property and Asset Insurance Policy :

Duly filled and signed claim form
The building plan
The FIR copy/ report or any other document showcasing the reason of loss or damage.
Bills and receipts
KYC documents
Damage certificate for equipment
Cancelled check

Keep in mind that the documents required to claim property and equipment insurance can vary with different insurance companies.

Summing Up!

Property and equipment insurance gives essential protection for your valuable assets. Knowing all the details about this insurance type, customizing coverage, filling claims, and implementing safety and security measures, can maximize the benefit of this insurance.

Frequently Asked Questions

The contents of your home are covered under a property insurance policy. These contents include the following – Furniture and fixtures, Television sets, Home appliances, Kitchen appliances, Water storage equipment, and Other household items Moreover, you can also pay an additional premium and insure your valuables like jewellery, pieces of art, curio, silverware, paintings, carpets, antiques, etc

Property under construction cannot be covered under property Insurance. Also, Kutcha construction is not covered.

There are several parameters that determine the cost of a premium amount such as: