Ten Thousand Sofas in Other People's Flats: Insuring a Rental Fleet That Has No Fixed Location

RentoMojo has fixed a price band of INR 384 to INR 404 per share for an IPO of INR 1,256 crore, comprising a fresh issue of INR 150 crore and an offer for sale of 2.36 crore shares. Anchor bidding is set for 8 September 2026, the book opens on 9 September 2026 and closes on 11 September, with tentative listing on 17 September 2026. The company operates an online rental and subscription platform for home furniture and appliances.

The listing is worth the attention of insurance buyers for a reason unrelated to the valuation. A rental and subscription business of this kind owns its entire asset base and stores almost none of it. The sofas, beds, mattresses, refrigerators, washing machines, televisions and air conditioners carried on its books sit in customers' flats, at addresses the company does not own, cannot survey and does not control. Its own warehouses hold only the units between two contracts: those awaiting refurbishment and those refurbished and waiting to go out again.

That inverts the assumption every standard Indian property policy is built on. A Standard Fire and Special Perils policy, a burglary policy and most equipment covers are written against a stated situation, a physical address an underwriter has inspected and priced. Here the insured value sits at thousands of situations simultaneously, each of them a private residence, and the population of addresses turns over continuously as contracts begin and end. Each unit also travels at least twice per contract, comes back with wear or damage, is refurbished, and goes out again to a different household.

A programme that answers this looks nothing like a factory or warehouse placement, and a business that buys the factory version because that is what the market offers finds out at the first claim.

The fire policy fails on its own description of risk. An SFSP policy insures property whilst contained in the premises described in the schedule. The moment a refrigerator leaves the depot in Bhiwandi and is installed in a flat in Whitefield, it has left the insured situation. A fire at that flat produces a claim that fails on the situation clause alone.

The floater does not rescue it. A floater cover allows a single sum insured to respond across more than one location, which is the right instinct, and the standard floater and declaration structures are built for stock that moves between warehouses. The construction still requires the locations to be specified. Four warehouses in Bhiwandi, Hosur, Kolkata and Guwahati can be named in a schedule. Tens of thousands of residential addresses that change every month cannot.

Burglary breaks in a different place. A burglary policy responds to theft following forcible and violent entry into the insured premises. When a subscriber stops paying and disappears with a washing machine, there is no forcible entry, the flat is not insured premises, and under most wordings there is no burglary at all. The loss is real, quantified to the rupee in the asset register, and the policy is silent on it.

The placement has to be built around two facts: the locations cannot be listed, and the total value at risk grows with the subscriber book rather than staying fixed for a policy year.

That points to a three-part material damage structure:

1. Named locations for the warehouses and refurbishment hubs, written conventionally with fire, allied perils and burglary at honestly declared peak values.
2. A goods at customer premises section for unspecified residential locations anywhere in India, with an overall sum insured, a per-location limit and a per-unit limit. The per-location limit is what makes this underwritable, because it caps exposure to any single flat regardless of how many addresses exist.
3. Transit cover attaching automatically to every movement, in both directions, without a per-consignment declaration burden.

A stock throughput form removes the seams between those three. It is marine-led and covers goods from procurement through inland transit, warehouse storage, delivery and the period at the end location under one contract and one set of clauses, which eliminates the argument about which of three policies was on risk at the moment of loss.

Valuation is the second decision and the one most often got wrong. Rental assets are depreciated aggressively for accounting, and insuring the fleet at net book value means a total loss pays a fraction of what replacing the unit costs, while every partial loss is scaled by the average clause if the declared value understates the value at risk. Build the sum insured on replacement cost of an equivalent unit and place the cover on a reinstatement basis, or it reimburses accounting rather than loss.

The section that carries the fleet needs a grant that says what it means: physical loss of or damage to the insured's own property while in the possession of hirers, lessees or subscribers at unspecified premises within India. Anything vaguer gets litigated.

Three points decide whether that section works at claim stage.

Perils at the customer's flat. Fire and allied perils are straightforward. Theft is not, because applying the forcible-entry precondition to a residence the insured has voluntarily placed goods in produces a cover that almost never responds. The workable position writes theft back with a defined evidence requirement instead: a police complaint or FIR naming the unit and its serial number, the hire agreement, and the delivery record.

The dishonesty carve-out. Insurers will exclude conversion, misappropriation and simple non-return by the subscriber, because that is credit risk dressed as a property loss. Where that line sits, and what evidence moves a loss across it, belongs in the policy wording discussion at placement rather than in a claim file.

Sublimits sized to reality. A per-unit limit set at the value of a mattress is useless when the same section has to answer a laptop or a large television. Appliances and electronics often sit better under an electronic equipment cover, built for the breakdown and handling damage that dominates that class, with furniture on the property section.

Underwriters pricing this will ask for unit counts by category, average and maximum unit value, the city mix, contract tenure, the KYC and security deposit process, the historical non-return rate and the recovery against it. A business that presents those figures is rated on its own experience rather than on the insurer's worst assumption about the class.

Every contract generates at least two movements: the delivery and the collection at the end. Relocations, upgrades and swaps add more. The damage that follows is ordinary and constant: a scuffed sofa arm, a cracked television panel, a compressor damaged because an air conditioner travelled on its side, a bed frame that lost a fitting between the lift lobby and a fourth-floor flat.

The cover that fits is inland transit written under a marine open cover or an annual declaration policy, so that each movement attaches automatically without a per-consignment instruction. The relevant conditions are the Inland Transit (Rail/Road) Clauses, where Clause A is the widest and the only version that answers the accidental handling damage that dominates this business. Clause B and Clause C are named-peril forms built for commodity cargo, and they leave most of these losses outside the grant.

Two details are worth pinning down in the wording:

• Handling at both ends. Loading, unloading, carriage by hand up stairwells and placement inside the flat are where the damage actually happens. Cover that attaches when the goods are on the vehicle and detaches when they leave it misses the majority of the loss frequency. The transit section has to extend to intermediate handling.
• The return leg. A collection from a customer is still a transit, and it carries a unit whose condition is disputed from the moment it is picked up. Cover that is written around outbound deliveries only leaves half the movements uninsured.

Recovery from a third-party mover is a weak substitute. Under the Carriage by Road Act, 2007, a common carrier's liability is limited unless the consignor declares the value of the goods and pays the higher freight, so subrogation against the transporter returns a fraction of the loss.

Between two contracts every unit passes through a refurbishment hub, the one part of the business that behaves like a conventional insurable risk and the place where value concentrates: the entire idle fleet, plus new stock awaiting first deployment, sits at a handful of addresses. Those locations deserve a surveyed fire and burglary placement with the peak declared, not a nominal sum insured chosen because the business thinks of itself as asset-light.

The refurbishment step creates a second exposure that has nothing to do with property. Under the Consumer Protection Act, 2019, a product liability action lies against a product manufacturer, a product service provider and a product seller, and a company that opens up an electrical appliance, replaces parts and puts it back into a household can be reached on the service and supply limbs. A hire rather than a sale does not remove the exposure.

The failure mode is specific. A re-let geyser, air conditioner or washing machine develops a fault that causes a fire or an electrocution in a customer's flat, and the loss runs to the customer's belongings, the flat, neighbouring flats and personal injury. No property cover on the fleet answers any of it, because the fleet cover insures the insured's own goods.

Technicians entering homes for installation, service and collection create a separate public liability exposure. The evidence that defends a product claim is built in the hub: serial-level records of what was tested, what was replaced, who certified the unit and when. A log that reconstructs the history of the exact unit that failed is what makes the claim defensible.

A subscription business carries two assets against every customer: the monthly receivable and the residual value of the equipment. A default that turns into a disappearance destroys both in one event, and the market does not offer a clean answer to either.

Trade credit is the instinctive place to look and mostly the wrong one. The IRDAI (Trade Credit Insurance) Guidelines, 2021 frame cover around trade receivables owed by identifiable buyers, underwritten against buyer-level credit limits with a proportion retained by the seller. That machinery suits a supplier with a countable set of commercial counterparties. A book of tens of thousands of residential subscribers on small monthly tickets does not fit it, and retail consumer credit generally sits outside the framework.

Fidelity cover answers a narrower and genuinely insurable slice: dishonesty by the insured's own employees, such as a delivery crew that diverts units that never reach a customer. It is worth placing, and it does nothing for the customer-default exposure, which stays retained.

What follows from that is a set of decisions that belong to operations rather than to a broker's slip:

• Security deposits sized against replacement cost by category, not a flat catalogue-wide figure.
• KYC and address verification strong enough to support a police complaint naming a traceable person.
• Payment mandates and arrears triggers that surface a problem while the customer is contactable.
• Serial-level asset tracking, so a missing unit can be identified and pursued individually.
• Provisioning that reflects the observed non-return rate rather than the intended one.

Design the programme on the assumption that this exposure stays on the balance sheet. Buying a property section in the belief that it quietly covers customer default produces the worst outcome available: premium paid, exposure retained, and the discovery made at the first significant loss.

A rental and subscription fleet needs four spines rather than one policy. Named-location property and burglary cover for the warehouses and refurbishment hubs at peak values. A goods at customer premises section for the deployed fleet, on unspecified locations with per-location and per-unit limits, valued at replacement cost. Automatic inland transit on every movement in both directions, on Clause A conditions extending to handling. And a liability tower reaching product liability for refurbished appliances re-let into homes and public liability for technicians working inside customer flats.

The shape is common enough to underwrite properly. It appears in furniture and appliance rental, equipment-as-a-service, device leasing, medical-equipment subscription and shared mobility fleets where the asset lives away from the operator. The common feature is an owned asset base at addresses the owner does not control, and the common failure is a schedule that describes a place instead of a population of places.

What decides whether each cover pays sits in the wording: whether the situation clause admits unspecified premises, whether theft at a customer's flat is written back, where the dishonesty carve-out sits, whether the transit grant covers handling and the return leg, and whether the product definition reaches goods refurbished and hired rather than sold. Those grants differ sharply across Indian insurers and rarely line up with how a rental business operates. Sarvada gives brokers and risk managers searchable access to insurer wordings, so each exposure can be matched to the clauses that actually respond. If you place or advise on rental, subscription or equipment-as-a-service risk, Request Access to compare the clauses that decide these claims.