Rising Temperatures Raise Risk: Why Property Insurance Matters This Summer
As summer temperatures soar across the country, the risk to homes, offices, and factories climbs. While most people worry about heatwaves and health, few realize the toll extreme heat can take on buildings. Experts warn that property insurance has never been more crucial.
“Climate change doesn’t only impact outdoor environments — it also significantly affects indoor spaces,” says Amitabh Dewan, Head – Large Risks, Policybazaar for Business. “Extended exposure to high temperatures causes materials like concrete, asphalt, and metal to repeatedly expand and contract. This thermal stress can lead to cracks, structural weaknesses, or even severe damage.”
For businesses, the stakes are even higher. Dewan notes that climate-related changes have shortened the return period for losses. “Whether it’s a commercial property, residential complex, or standalone house, property insurance plays a critical role in offering financial protection against unexpected events like fires and natural calamities.”
Fires, Overheating, and Why Insurance Matters
Rising summer temperatures increase the risk of fires. Faulty wiring, overloaded circuits, and overheated equipment can quickly escalate into fire incidents. This is where fire insurance steps in. Fire insurance typically covers damage or loss involving the structure, office furnishings, manufacturing machinery, stored inventory, electronic systems, pipelines, and even business interruption due to fire events.
Policies usually protect against fire, lightning, explosions, natural disasters, landslides, and bushfires. Many businesses also opt for additional coverage for earthquakes, forest fires, or spontaneous combustion.
Types of Policies Available
Indian businesses can choose from:
- Industrial all risk policy: Comprehensive cover for large industries.
- Standard fire and special perils policy: A named-perils plan listing covered risks.
- Bharat Laghu Udyam Suraksha/Bharat Sookshma Udyam Suraksha: Tailored for small and medium enterprises.
These policies provide standardized, transparent, and cost-effective protection.
Know the Exclusions
It’s essential to understand what’s not covered. Common exclusions include intentional damage, war, misplaced items, electrical leakage, pollution, consequential losses, vacant premises (over 30 days), and direct short circuit damage (though fire from a short circuit may be covered).
How Premiums Are Set
Property insurance rates in India are regulated by the Insurance Information Bureau (IIB). Pricing depends on the industry type, past loss records, and whether the cover includes additional perils like storms or earthquakes. India’s earthquake risk is further classified into four seismic zones, influencing premiums. For large corporations, options like industrial all-risk insurance or mega insurance policies (for sums insured over ₹2,500 crore at a single location) provide customized, all-risk cover.
