What is Property Insurance?
As mentioned above, property insurance provides coverage for buildings or properties against any loss or damage. In some cases, the coverage may extend to the contents of the insured property, such as inventory, clothes, jewellery, electronics, furniture, and machinery.
A property insurance policy comes into effect in case of loss or damage to the insured property due to a natural or man-made calamity, such as fire, theft, burglary, earthquake, storm, lightning etc.
Property insurance can be availed by anyone who owns a residential or commercial property, be it a house owner, restaurant or café owner, renter, or a factory owner. Common examples of property insurance include homeowner’s insurance and commercial property insurance.
What is Fire Insurance?
Just like property insurance, fire insurance also provides coverage against any loss or damage to the insured building or property. However, it differs from property insurance in terms of hazards or perils covered by it. In fact, fire insurance is a sub-part of property insurance.
A fire insurance policy provides coverage only against fire accidents and related perils. It means that it will cover the damages to a property only if they are caused due to an unforeseen fire or related perils such as lightning, implosion, explosion, smoke, and thunder.
Differences between Fire Insurance and Property Insurance
Below are the basic differences between fire insurance and property insurance, on the basis of certain parameters:
As mentioned above, fire insurance covers only fire accidents and related perils. It doesn’t provide coverage if the damages are caused by perils other than fire. However, property insurance provides coverage against “all types of perils”, including fire, burglary, riot, theft, and natural calamities.
Since property insurance offers a more comprehensive protection to property owners, the premium rates for property insurance policies are usually higher as compared to standalone fire insurance policies.
Fire insurance are mainly designed for private house owners. On the other hand, property insurance is more beneficial for commercial property owners as they provide comprehensive protection for properties such as offices, factories, hospitals, shopping malls etc.
Many insurance companies offer fire insurance and property insurance in India. You should make a choice on the basis of your personal insurance needs. Though property insurance covers fire-related mishaps, it’s advisable to purchase a separate fire insurance policy for your property to ensure maximum protection against the adversities.