Building Insurance

Building insurance is a legal contract between the customer and the insurer which states that in case of any loss or damage caused to the insured building the insurer will compensate for the specified inclusions of the policy. Since, accidents happen unannounced and whether you own a house, a commercial building, a shop or any kind of property then in order to keep yourself protected from any unforeseen incident then building insurance would work in your favour.

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What is Building Insurance?

Building insurance is a type of insurance policy that can provide you financial aid in case of any loss or damage caused due to fire, theft, natural disaster, etc. Recently, the incidents of natural disasters have increased in the country such as typhoons, storms, floods, etc. When such natural calamity takes place then it not only damages the things out of your building like cars, trees but also damages the building.

Since you own a building and you must have made a huge investment into it then you need building insurance to protect it from any disaster that could cause any kind of loss or damage to it.

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Why Purchase Building Insurance?

When you own a building then it is important that you protect it from any kind of peril. Here are some of the reasons that make purchasing building insurance necessary:

  • As per a report of India today, burglary and robbery take place every 3 minutes in India.
  • In 2017, there was a 40% increment in loss of property due to theft in residential as well as commercial premises in India.
  • Fire incidents are one of the topmost risks to your building.
  • If you take a loan from the bank to construct your building then the bank will ask you if you have insured the property or not for which you want to take a loan.
  • In case of any damage to your building, the insurance plan will cover the expenses incurred in the repair.
  • The building insurance also provides cover for the appliances inside the building such as air conditioner, television, electric appliances, etc.
  • The right building insurance will provide you cover even if you are not inside that building and you are somewhere else.
  • Building insurance will not only provide you financial aid but peace of mind and keep you tension-free.

Benefits of Building Insurance

Here are the benefits of purchasing building insurance.

  • Building insurance provides you complete coverage. It covers the building as well as the content of the house. Many insurers also provide add-ons that you can purchase separately if the existing policy misses something.
  • It comes with a customization option and it can reduce the risk by protecting your business, shop from any kind of damage or loss caused by fire, flood, burglary, etc.

What is Covered Under Building Insurance?

Here are the things covered under the building insurance policy.

Fire Incidents

Fire can annihilate your building be it commercial or residential. This insurance policy provides you cover for the loss or damage caused by fire.

Theft & Burglary

This insurance policy provides you cover for any theft or burglary of your valuable items like jewelry, cash, etc.

Electrical Breakdown

If there is an electrical breakdown and any electrical appliance gets damaged due to sudden high power flow then this insurance policy will provide you cover for that also.

Natural Disaster

60% of Indian land is prone to earthquakes, 12% to floods, and 8% to cyclones. In this case, if there is any damage or loss caused by any natural calamity like floods, typhoons, cyclones, etc. is covered under this policy.

Manmade Hazards

This insurance policy provides cover for manmade disasters that can take place in riots, terrorist attacks, etc.

Accidental Damage

Accidental damages can happen unannounced and this insurance plan provides cover for those accidental damages.


In case the building that you have covered with this policy is a residential building and due to an earthquake few of the flats in that building gets damaged then this insurance will provide cover for alternative accommodation for the people living in those damaged flats until they get repaired.

What is Not Covered Under Building Insurance?

Here are the things that are not covered under the building insurance policy.

Damage In War

Any kind of loss or damage caused to the building during a war or invasion by any foreign country is not covered.


In case you like to collect antique items like coins, art, stamps, etc. and they get damaged or you lose it or get stolen will not be covered under this policy.

Old Items

Old is gold but this insurance policy does not provide cover for the items that are more than 10 years old.

Consequential Loss

Consequential losses are the kind of losses that does not happen from a direct impact. Such losses are not covered under this policy.

Willful Act

If there is any damage or loss caused by the insured willfully then this insurance plan will not provide cover for it.

Damage By Third-Party Construction

In case you building get damaged during a third-party construction, this insurance plan will not provide cover for it.

Wear & Tear

This insurance plan does not provide cover for any wear and tear or damage caused during renovation or maintenance.

Land Cost

The cost of land is not covered under this policy.

Under Construction Property

This insurance plan does not provide cover for any under-construction building.

Types of Building Insurance Plans

Insurance companies offer building insurance plans under the customers get three options. The options that the customers get are as follows:

Option 1: You can purchase insurance that covers only the content of the house or business

Option 2: You can purchase the insurance plan that covers both contents as well as the building of the home or business

Option 3: You can purchase the insurance that covers building, contents, valuables like cash in locked or in the counter of your shop.

Types Of Properties Covered

Here are the types of properties that can be covered under this insurance plan. They are as follows:

Appliances Store

If you run a business and sell electronics like television, mobile phones, etc. then you should purchase this policy will protect your showroom or store from where you run your business. Since these stores are more prone to theft and burglaries, this insurance will cover all kinds of losses or damages.

General Store

Whether it is a kirana store or a supermarket like Big Bazaar, Reliance supermarket, this insurance plan will protect your store from any loss or damage caused by theft, natural calamity, etc.

Offices, Schools & Colleges

This insurance policy is designed to protect your office buildings, school buildings, college buildings and all kinds of education institutes.

Gyms, Spas, Salon

This insurance plan provides cover for your malls, clothing stores, gyms, spas, etc.

Café, Restaurant

From cafes, restaurants to food trucks and bakeries, this insurance policy provides cover for all of it and you can customize the policy as per your requirement.


Apart from everything mentioned above, this insurance policy can provide cover for any building and if you are not able to find the category you are looking for then you can contact your insurer and learn about the policy in detail.

Eligibility Criteria To Purchase Building Insurance?

In order to purchase the building insurance plan, you have to be eligible. Here are the eligibility criteria to purchase the building insurance:

Own A Home

If you have recently moved into your new house or living in your house for years, it is your most valuable asset hence protecting it from unforeseen situations that can cause damage or loss would be a better idea. If you own a home then you can surely purchase the building insurance plan.

People Living On Rent

Usually, people think that only homeowners can purchase a building insurance plan. However, insurance companies offer customized insurance plans if you live in a rented flat or doing business in a rented shop then you can purchase this insurance plan

Small, Medium & Large Business Owners

Whether you run a small business, a general store of medium size enterprise or run a large business, you need to protect your business from any sudden damages that can put a hole in your pocket. If you own any kind of business and run it from a shop or office then you can purchase this insurance plan.

How is Building Insurance Premium Calculated?

Here are the factors that play huge role in fixing your insurance premium.

  • The type of building you want to insure will play a huge role in your building insurance premium rate. For example, an office building will have a higher premium than a shop because of the difference in nature and size of the building.
  • Age is one of the major factors that are focused on while determining the premium amount of the policy. The older the building, the lower the premium amount.
  • The area you live in also plays a huge role in determining the premium of the policy. For example, if you live in an area that is prone to floods then the premium amount will be high.
  • If your building is under CCTV surveillance and water sprinklers are also installed to protect your building from fire accidents then the premium amount of your insurance plan will be less.

Building Insurance FAQs