What is Burglary Insurance? What Does it Cover and Not Cover?

Burglary Insurance is an essential financial safeguard for individuals and businesses in India, offering protection against losses due to theft and break-ins. Whether you own a home, a retail store or a large commercial establishment, Burglary Insurance can help mitigate financial risks associated with stolen property and damage caused during unauthorised entry. This guide explores the key aspects of Burglary Insurance, its benefits, exclusions and factors affecting premiums in India.

What is Burglary Insurance?

Burglary Insurance provides coverage for losses arising from theft or forced entry into insured premises. It compensates for stolen goods, property damage due to burglary attempts and, in some cases, vandalism accompanying the act of theft. Policies may be customised for homeowners, shop owners and large business establishments based on specific needs.

Key Features of Burglary Insurance

• Coverage for Stolen Items: Covers loss of insured goods, cash or valuables due to burglary.
• Property Damage Protection: Pays for damages caused to premises during break-ins, including broken doors, windows or safes.
• Customized Policies: Available for residential and commercial properties with coverage tailored to different risk levels.
• Policy Extensions: Some insurers offer optional add-ons such as coverage for riots, malicious damages and employee dishonesty.

What is Covered Under Burglary Insurance?

1. Loss of Property and Valuables: Coverage for loss or damage to assets, including inventory, machinery and personal belongings.
2. Damage to Premises: Pays for repair costs of structural damage caused by burglars while entering the insured premises.
3. Optional Add-Ons: Additional coverage for riots, strikes and vandalism, subject to policy terms.

What is Not Covered? (Exclusions)

Here is a list of some of the common exclusions mentioned in a fire and burglary insurance policy:

• Coverage for precious gems, jewellery, business books, cash, designs, plans, etc. unless specifically covered.
• Loss or damage where an insured or his staff/family member was involved in the actual theft
• When the property of the insured is left uninhabited for 7 or more days in a row.
• If material alterations are done to the premise that increases the risk.
• If the asset or property rights have been transferred to another individual(s) by the insured through a will or by operation of law.
• Damage(s) that result from a nuclear peril are not covered by Fire Insurance
• Damage(s) caused by war, a foreign enemy’s act, invasion, etc are not covered in Fire Insurance.
• Any damage(s) caused by nationalisation, seizure, etc by Government authorities are excluded in fire insurance.
• Damages resulting from any sort of consequential loss are not covered in fire insurance.
• Damage(s) caused by riots, strikes, civil unrest and so on are not covered in Fire Insurance.

Types of Burglary Insurance Policies

1. Business Burglary Insurance

Designed for commercial establishments, this policy covers losses due to theft of business inventory, machinery and cash stored within the premises.

2. Residential Burglary Insurance

Aimed at homeowners and tenants, this policy covers stolen household items, jewelry and other valuables inside a residence.

3. Cash-in-Safe or Cash-in-Transit Insurance

Provides coverage for theft of cash stored in safes or stolen while in transit between locations.

Replacement Cost vs. Actual Cash Value

Burglary insurance may compensate policyholders based on:

• Replacement Cost: The amount required to replace stolen goods with new ones of the same kind.
• Actual Cash Value (ACV): The depreciated value of stolen items at the time of loss.

Most standard burglary insurance policies offer ACV coverage unless replacement cost is opted for as an add-on.

Factors Affecting Burglary Insurance Premiums

The cost of Burglary Insurance depends on various factors, including:

1. Location and Crime Rate: High-crime areas generally attract higher premiums.
2. Type of Business or Property: Businesses dealing with cash or high-value goods may face higher premiums.
3. Security Measures: Installation of security systems, surveillance cameras and alarm systems can lower premium costs.
4. Coverage Amount: Higher coverage limits result in higher premiums.
5. Claims History: Frequent claims may lead to increased renewal premiums.

Conclusion

Burglary Insurance is a crucial financial protection tool for individuals and businesses against theft-related losses. Understanding coverage options, exclusions and premium determinants helps in selecting the most suitable policy. Before purchasing a Burglary Insurance Policy in India, carefully assess your risk exposure and compare different insurers’ offerings to ensure comprehensive coverage.

Note: The specifics of Burglary Insurance coverage vary by insurer. Always read the policy documents carefully and consult an insurance expert if needed.