HDFC ERGO launches Inherent Defects Insurance Policy
India’s third largest non-life insurance provider in the private sector, HDFC ERGO today announced the launch of the ‘Inherent Defects Policy’, a first-of-its-kind product in the non-life insurance sector. This new insurance policy provides cover to new buildings or civil structures against any damage caused by inherent structural defects.
Inherent Defects Insurance Policy offers comprehensive protection against structural defects such as the cost of repairing, restoring or strengthening of the insured building. This product addresses one of the requirements of the recently enacted Real Estate (Regulation and Development) Act 2016 (RERA) that has mandated real estate builders to rectify any structural defects within thirty days, if brought to their notice in a period of five years from the date of handing over possession.
Commenting on the launch of the new policy, Mr. Mukesh Kumar, Executive Director, HDFC ERGO General Insurance Company said, “Inherent Defect Policy’ was launched to address the needs of real estate builders and provide them with a comprehensive cover against any damages arising during the construction of the building.”
The new policy can be obtained prior to the construction of the building. An Independent Technical Inspection Service team is appointed during the course of construction to carry out monitoring activities on the quality of the building which includes services ranging from sample designs checks to witnessing tests at site.
“This product will not only help developers but also help housing societies if any damage is caused by inherent structural defects,” Kumar added.
The insured can opt for Inherent Defect Policy for a maximum period of five years. The premium of the policy is derived based on various factors such the occupancy type i.e. residential, commercial building, number of storeys, site location, topography, foundation type, contractor’s / designers reputation. Also, this policy is assignable during the five year period which means that the subsequent owners of the property will be assigned the rights of this policy.