Many housing societies assume that once insurance is purchased and renewed every year, they are financially protected against any major loss. In reality, insurance is only one part of a society's risk management.
The key is understanding what the policy actually covers and whether the society is prepared to support a claim.
1. Insurance does not cover everything
Policies have specific coverage, exclusions, limits, deductibles, and conditions. Fire or accidental damage may be covered, while ageing, poor maintenance, or gradual deterioration may not be.
2. Underinsurance can create a major gap
Construction costs, labour charges, inflation, and common assets change over time. If the insured value is not reviewed regularly, the payout may not be enough to restore the building after a major incident.
3. Maintenance still matters
Insurance cannot replace preventive maintenance. Neglected waterproofing, electrical systems, pipelines, fire equipment, or structural issues can create additional risks and complications during a claim.
4. Documentation can make claims easier
Policy documents, maintenance records, inspection reports, invoices, photographs, repair estimates, and asset details should be properly maintained and easily accessible.
5. Insurance renewal should be a governance exercise
Every renewal is an opportunity to review the building's current value, assets, risks, liabilities, and plans rather than simply renewing the same policy.
Before renewing the society's insurance, committees should ask:
- Is our building adequately insured?
- Have our common assets and replacement costs changed?
- What exactly is covered and excluded?
- Are our maintenance and inspection records complete?
- Could we produce the required documents quickly if a claim arises?
Insurance is not a substitute for maintenance, documentation, or good governance.
The safest housing societies are not simply those with the biggest insurance policies. They are the ones that understand their risks, maintain their assets, organise their records, and review their coverage regularly.
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