The Essential of Property Insurance: Protect Your Investment!

by BVR Property Team
12 January 2024

Obtaining property in Indonesia is a dream for many investors around the world. However, after obtaining your dream property, there are some property risks you should pay attention to. Property insurance is one aspect that you must consider to make your property secure. This article will cover types of property insurance, benefits, and costs.


Let’s dive in!


Understanding Property Insurance in Indonesia

Property insurance is a mechanism that provides financial protection for houses, villas, or other types of real estate against various property risks.


This insurance holds significance as it safeguards against potential property risks that possibly damage your property – flooding, fire, or even criminal activities.


Whether you’re a foreign investor who has a property through HGB or leasehold title, or an Indonesian property owner who has the property through Hak Milik, it’s crucial to be mindful of these risks and take measures to prevent their occurrence.


Additionally, it is capable of restoring the value of damaged property or replacing missing items. In essence, property insurance goes beyond mere risk mitigation, it becomes a vital necessity.


Therefore, if you’re a foreign investor, ensure that the property you have is secured through property insurance. You can confirm this by conducting due diligence.


This insurance scheme is much like other forms of insurance. The insurance company will provide a written agreement to formalize the arrangement with you as the customer. Then, you will pay the periodic premium fees according to the agreement.


There is a service called “all-risk” in this insurance, which offers protection against a range of accidents on your property – fire, theft, flooding, natural disaster, or explosion.


If an accident occurs to your property, the insurance company will conduct a survey and documentation for calculating your losses.


The insurance company will pay compensation for your claim under the previously agreed-upon terms.


Types of Property Insurance

In general, there are two types of property insurance in Indonesia – home insurance and business insurance.


1. Home Insurance

Home insurance is one type of property insurance that is aimed to cover and protect residential properties.


Commonly, residential properties are usually damaged by several causes like flood, earthquake, fire, and theft.


2. Business Insurance

This category of property insurance is specially designed for commercial or business properties. Business insurance addresses similar property risks to home insurance, but it’s tailored to meet the specific needs of companies as well.


Property Insurance Benefits

There are several benefits that you can obtain through property insurance, such as:


- Compensate for damage or loss to your property.

- Protect your property financially.

- Keep your property’s value.

- Avoid of unforeseen financial burdens.

- Peace of mind.


However, you must pay the periodic premium fees according to the agreement. Your premium funds will be forfeited if the payments fail.


How to Choose Property Insurance?

Numerous insurance companies provide property insurance in Indonesia. Each of them offers distinct services for their customers. So, you need to weigh various factors before deciding on the insurance provider that best suits your needs.


Here are the tips on how to choose property insurance in Indonesia, as follows:

- Understand the property risks they cover.

- Examine the risk coverage extensions provided.

- Research about natural disaster risks they provide.

- Investigate the categories of items covered by the insurance.

- Review the procedures regarding the premium and its payment.

- Observe the amount of the compensation money, along with any exceptions.

- Get to know how to submit a claim.

- Observe the policy terms relating to the policy validity period.


Mastering Property Insurance for Securing Investments!

Despite you have taken security measures such as installing CCTV or hiring security personnel, some property risks cannot be fully mitigated through these ways. Moreover, the potential financial loss amount of property damage can be substantial.


Property insurance plays a big role to secure your property financially. It covers many types of property risks including natural disaster, fire, and theft. However, you must consider many factors before deciding property insurance provider you will choose. Let's secure your property financially by obtaining a property insurance.

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