Real Estate Insurance: How to Receive Guaranteed Indemnity?

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What is the correct way to fill out the insurance application in order to avoid problematic claim settlement?  

What you consider to be real estate object and what is actually covered by the insurance agreement can sometimes differ greatly. Such misunderstanding might result in completely legal indemnity denial.

What you consider to be real estate object and what is actually covered by the insurance agreement can sometimes differ greatly. Such misunderstanding might result in completely legal indemnity denial.
The most important rule to remember is that Insurer can not, does not want and should not be able to read Insured’ mind.

If you are drowning, you are on your own. Especially if you are not willing to use the broker’s advice who is at your arms length to offer you a lifeline.

Therefore let’s look closely at one of the basic clauses in the real estate property insurance agreement. That is in fact, Insured Property. The logic runs that the property which is left out of the agreement should not be covered by the insurance policy.  

Each insurer has different definition when it comes to the identification of the insured property. Imagine that the policy reads as “buildings and facilities”. If no specification is made to this term, the insurance company has a right to deny indemnity if any of the interior finishing works are damaged.  The reason for that is quite simple. The majority of the insurance companies mean by this term only structural parts of the buildings such as foundation, walls, partition-walls, doors, windows etc.).  

Of course, this might do if you only need the basic insurance coverage for plain real estate object such as simple cattle barn serving as the collateral for the bank.

However fancy the insured property being a modern warehouse. While it still can lack expensive finishing works, you can bet on it being filled with facility lines, cables, alarm systems, surveillance systems, fire-extinguishing systems etc.

Make sure to read the Insurance Terms and Conditions closely. Some insurance companies imply that the facility lines are the integral part of the buildings. Some, on the contrary, define them as the independent category of the property which can be insured. Therefore the best choice would be to specify the insured property as “buildings and facilities including utility lines and equipment”.

Insurance policies covering such real estate objects as trade & entertainment centers as well as business centers require even more demanding approach.   Even of structural parts, utility lines and equipment as well as internal finishing works are specifically named in the insurance agreement, there are still many components which should be identified separately.

Many insurance companies view the following as the independent categories of the property which is subject for insurance:

  • exterior finishing works;
  • glass elements;
  • external utility lines;
  • equipment and elements attached to the outer side of the building (aerials, commercial signs, billboards etc.) 

Naturally, standard insurance policy would not stipulate for the coverage of property located within the territory of the Insured such as fences, transformer buildings, checkpoints with the lifting barriers etc. Ironically enough, they can even be in your books, and the sum insured can also include their value.


Any property listed in the application can be insured. However please don’t make your insurance partner read your mindю Don’t expect them to cut you some slack. Insurance company is not a charity organization. Insurance is a business, just like yours.

Take your time to think through the property you would like to insure.  Make sure to provide as detailed a definition of the insured property as possible. If not, then the insurance policy will have flaws, and not due to the fault of insurance company.

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