Fire insurance in apartments: What your RWA covers, and what it doesn’t

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• RWA fire insurance covers only the building structure and common areas.
• Flat owners need separate policies to insure interiors and personal belongings.
• Underinsurance can lead to smaller payouts and unexpected costs for residents.

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In an independent house, it’s simple: you insure your home and your stuff. In an apartment complex, it’s split between the RWA and individual owners, and that’s where confusion starts. People assume the maintenance covers “insurance” and insurance covers “everything”. Then there’s a fire, a short circuit, a kitchen blaze, smoke damage across multiple floors — and suddenly everyone is asking the same question: who pays?

The uncomfortable answer is: it depends on what’s written in the policy, and most people have never read it.

What the RWA policy usually covers

The RWA’s fire insurance is typically meant to protect the building as a structure. Think of it as the skeleton and the shared parts: staircases, corridors, lifts, shafts, common wiring, basements, pumps, DG rooms, the club/office, shared equipment and sometimes common-area fixtures.

It’s not designed to replace what you own inside your flat. And it’s definitely not designed to pay for your modular kitchen, sofa, TV, or your custom wardrobes.

This is where expectations and reality collide.

What flat owners are responsible for

If you want coverage for what’s inside your flat, you usually need your own policy. That includes interiors and contents: woodwork, false ceiling, internal fittings, appliances, furniture, electronics, clothes, valuables. Even the “boring” things add up quickly — curtains, mattresses, kitchen appliances, laptops — and these are exactly the things people lose in smoke and water damage.

The frustrating part is that many owners discover this only after the loss, when they’re told, politely, that the society policy doesn’t apply.

The builder flat vs the flat you actually live in

Here’s a common trap. Even if the building insurance touches something inside your flat, insurers often look at what was part of the original builder handover versus what you added later. Builder basic tiles and paint are one thing. Your upgraded flooring, cabinetry, fittings, expensive lights and redesigned kitchen are another.

So you might hear something like: “We can cover the basic reinstatement, not your upgrades.” That becomes a fight very quickly, because no one wants to be told their home will be restored to a version of 2012.

The claims that turn into society drama

After any fire incident, these are the arguments that usually erupt in the WhatsApp groups and AGMs.

Owners ask why their internal losses aren’t being paid. The RWA says the policy is only for the building. People accuse the RWA of buying a cheap or incomplete policy. Insurers start asking uncomfortable questions about wiring, maintenance, inspection records and whether fire equipment was functional.

If the fire spreads across multiple flats, you also get the “who started it” blame game. Sometimes liability issues come in, especially if one flat’s accident damages another.

Underinsurance: The silent problem nobody notices

This is the big one, and it is surprisingly common. Societies often insure the building for an amount that “sounds large” but isn’t close to what it would actually cost to rebuild today. Construction costs have climbed fast. If the sum insured is too low, insurers can apply what is essentially a proportional cut in payout.

So even when the claim is genuine, the cheque is smaller than everyone expects. And then the RWA has to raise special assessments — which residents hate.

What RWAs should get right (without overcomplicating it)

RWAs don’t need to become insurance experts, but they do need to do three basic things well.

First, insure at reinstatement value — the cost of rebuilding the structure — not market value, and definitely not a random number carried forward year after year.

Second, communicate clearly. Once a year, share a simple note with residents: what the society policy covers and what it does not. This one step prevents 80% of post-fire anger.

Third, keep maintenance and documentation tight. If extinguishers, alarms, hydrants or pumps don’t work, it can complicate claims. Insurers don’t like paying when safety systems were ignored.

What flat owners can do in one afternoon

If you own a flat, don’t assume you’re covered just because the building is insured. Ask the RWA for the policy summary. Then decide if you need your own home insurance.

Most home insurance is not expensive compared to what it protects. And the real value is that it covers the things you’ll feel immediately: repairs to interiors, replacement of contents, and sometimes even temporary accommodation if your flat becomes unliveable after a fire or smoke damage.

The simple takeaway

Think of fire insurance in apartments as a two-part system. The RWA protects the building. You protect your home. If either side assumes the other has it handled, that’s when the gaps show up — usually at the worst time possible.