Property Insurance In India – What Gets Covered, What Doesn’t (2025 Guide)

Whether you own a home, shop, warehouse, or office, property insurance protects you from unexpected financial losses. In 2025, with the increase in extreme weather events, theft, and accidental damages, having the right cover is more important than ever.

But here’s the catch — property insurance doesn’t cover everything. Understanding exactly what’s included and excluded will help you avoid nasty surprises when filing a claim.

What Property Insurance Covers

Covered Event	Examples
Fire & Explosion	Kitchen fire, electrical short-circuit, gas explosion
Natural Disasters	Earthquake, cyclone, flood, storm
Theft & Burglary	Break-in and stolen valuables
Accidental Damage	Water pipe burst damaging walls
Contents Cover	Furniture, appliances, electronics

What Property Insurance Doesn’t Cover

Wear and Tear: Gradual damage from ageing or poor maintenance.
War & Nuclear Risks: Damages from war, riots, or nuclear accidents.
Deliberate Damage: Caused intentionally by the owner.
Unoccupied Property Loss: If property remains vacant beyond policy limit.
Illegal Construction: Claims denied for structures violating building codes.

Tips to Choose the Right Property Insurance

Assess Rebuilding Cost: Base coverage on actual reconstruction value, not market price.
Cover Both Building & Contents: Protects structure + belongings inside.
Add Riders: Protection against terrorism, rent loss, and valuable items like jewellery.
Review Deductibles: Higher deductibles lower premium but increase out-of-pocket costs.

Case Example

Kavita’s boutique was damaged in a flood. Her policy covered the building but not the ₹8 lakh worth of designer clothes inside. A contents cover add-on could have saved her from that loss.