Flat owners in a housing society may think about insuring what’s inside their homes. Far fewer ask who insures the building itself: the structure, lifts, water tanks, staircases, compound walls and shared equipment that every resident depends on. In many societies, that responsibility sits with the managing committee, and getting it wrong can leave residents sharing a very large bill after a fire or flood.

Who Is Responsible for Insuring the Building

In a cooperative housing society, the society usually owns or manages the common structure and amenities, while individual members own or hold rights to their flats. Many society bye-laws require the committee to insure the building, but practices vary between states and societies.

The core of building cover is fire insurance, which in India extends well beyond fire alone. Standard policies typically cover lightning, explosion, storm, flood, inundation, riot and strike damage and impact damage, and many standard products include earthquake, subject to policy terms.

Common Risks Residential Buildings Face

Residential buildings face a mix of risks. Electrical short circuits in meter rooms or individual flats can start fires that spread through shafts and corridors. Monsoon flooding can damage basements, parking areas, pumps and lift pits, especially in low-lying neighbourhoods.

Older buildings may have ageing wiring and plumbing, while high-rises depend heavily on lifts, fire systems and backup power. Knowing which risks apply to your building helps the committee choose the right cover and spend money on prevention where it matters most.

What Society Cover Typically Includes

A society’s property insurance policy usually covers the building structure, common areas, lifts, pumps, generators, water tanks, electrical installations, compound walls and fixtures owned by the society. Some policies can also cover society office contents and equipment.

The exact scope depends on the product chosen and what’s declared. Residential buildings can be insured under products designed for dwellings, such as Bharat Griha Raksha, which IRDAI introduced as a standard home insurance product in April 2021. Larger or mixed-use buildings may need a different product.

What Individual Residents Should Insure

Society cover generally protects the structure and common assets, not residents’ personal belongings. Furniture, electronics, appliances, clothing, jewellery and interior improvements inside each flat usually need separate home contents cover bought by the resident.

Residents should check what the society policy includes before buying their own. Some members may also want structure cover for their own flat, depending on how ownership and responsibility are set out in the society’s rules.

Choosing the Right Sum Insured

For buildings, the sum insured should reflect the cost of reconstruction, not the market value of the flats. Market value includes land, which doesn’t need insuring against fire or flood. Reconstruction cost depends on built-up area, construction quality and local building rates.

Underinsurance is a common problem. If the sum insured is too low, claims may be reduced in proportion. Review the figure every few years, or after major repairs and upgrades such as new lifts or façade work.

Liability and Other Useful Covers

Residents, visitors, staff and contractors use common areas every day. A society can face claims if someone is injured because of a broken staircase, a falling façade element or a lift accident. Public liability cover can protect the society against such claims, subject to terms.

Other covers worth considering include machinery breakdown for lifts and pumps, cover for society staff and fidelity guarantee for office bearers handling funds. Each addresses a different risk, and committees should choose based on the building’s profile.

Exclusions and Limitations

Building policies generally exclude wear and tear, gradual deterioration, structural defects from poor construction, and seepage or leakage developing over time. Damage from wilful acts and war is also excluded. Theft is usually covered only if it follows an insured event, unless separate burglary cover is bought.

Each claim may carry an excess, and certain items may be subject to limits. Committees should read the policy wording and the Customer Information Sheet carefully and share the key points with members.

Common Mistakes Societies Make

A common mistake is letting the policy lapse during a committee change or because nobody tracked the renewal date. Another is insuring at an outdated value set years ago. Failing to tell the insurer about changes, such as adding commercial units or renting out the terrace, can also affect cover.

Poor records cause trouble too. Keep building plans, maintenance records, asset lists and photographs, and store copies off-site or digitally.

Practical Steps for Committees

Appoint one committee member to manage insurance, track renewal dates and keep documents. Get an estimate of reconstruction cost from a qualified professional and use it to set the sum insured.

Explain to residents what the society policy covers and what they need to insure themselves. Keep a copy of the policy in the society office and share a short summary with members, so everyone knows whom to contact after an incident. Clear communication avoids disputes after a loss, when tempers and costs are both high.

A well-insured building protects every resident at once. A little attention from the committee each year can prevent a disaster from becoming a lasting financial burden.