Many people use burglary and theft interchangeably, but they are slightly different from one another. It is important to understand the difference between these two concepts from an insurance perspective.
Recognising the one small distinctive feature that sets these two apart is vital to comprehending the difference between theft insurance and burglary insurance. Theft insurance offers financial coverage for loss of property by theft, i.e., taking of the property, item or asset.
This blog will help us understand burglary insurance, its different components, and burglary insurance types.
Burglary Insurance: Meaning
Burglary insurance is a type of property insurance that offers protection to a property, residential or commercial.
What sets burglary apart from theft is that burglary involves breaking and entering a property with conscious and deliberate intentions to steal from said property. This act leaves behind a trail of loss and damage, along with the loss that occurred due to the theft itself.
Standard burglary insurance covers property damage, stolen items, the first loss (policy providers offer a percentage of the total sum insured), full value and a few additional benefits.
Burglary insurance coverage comes in different types and the scope of coverage can vary across insurers. Let us understand the different types of burglary insurance.
6 Types of Burglary Insurance Policies
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Stock Declaration Policy
Stock declaration policy offers great coverage for businesses that deal with manufacturing, storing and shipping goods. This burglary insurance coverage is ideal for businesses with fluctuating stock levels.
The policy allows you to declare the value of your current stock on a periodic and regular basis. This allows you to update the insurance providers about the real-time value of your stock, ensuring optimal coverage at the time of claim.
The stock’s value, coverage and premium amount are all interlinked in this case. For instance, if the stock value is less, the coverage is less, and so is the premium. With an increase in stock value and coverage, the premium will increase as well.
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First Loss Policy
The term first loss policy refers to burglary insurance coverage that offers coverage for a specific percentage of the total stock, property or asset. This type of policy is highly suitable for big stores, storage rooms and manufacturers.
Since the products and goods in the property are so huge in quantity and size, total loss is not a plausible possibility. Hence, the insurance company agrees to cover a predetermined amount of the total insured value.
For instance, if a storage room has a stock of ₹10,00,000 and the predetermined first-loss limit is 30%, the provider’s payment will be ₹3,00,000. This is how the first-loss policy in insurance for burglary works.
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Full Value Policy
Full value policy is a plan that offers financial coverage and benefits for the total calculated value of the insured property. In case of burglary, the insurer will compensate the policyholder up to the amount of loss or total insured sum, whichever is lower.
This is a comprehensive burglar insurance coverage that is suitable for properties that are highly likely to experience total loss in case of a burglary. These policies demand higher premiums.
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Money/Cash/Jewellery Policy
Most businesses have monetary assets in all forms, be it cash, digital, plastic or coins. A residential property in India is highly likely to house gold and silver jewellery, cash, plastic money and other valuables.
This policy offers coverage for the loss of money in transit, cash in the safe, and jewellery and valuables on the insured property.
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Breaking-In Homeowners Policy
Breaking-in homeowner’s policy is a policy with comprehensive burglary insurance coverage. It is insurance for burglary in a residential property and offers coverage for loss and damage caused by the same.
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Business premise Policy
The business premises policy provides financial coverage and benefits for losses that arise from theft, property damage, equipment loss, and other types of losses due to theft and burglary.
Summing It Up!
Insurance for burglary is essential for a business to minimise the risk of attack and theft. In India, you find multiple burglary insurance types. This is all thanks to dynamic insurance providers like Tata AIG, who offer burglary insurance.
Understanding the types of burglary insurance allows you to make informed decisions regarding your business. Align the scope of the policy with the risk your business might face the most. You can always customise the plan for additional coverage.
