Home Insurance

Home insurance protects homeowners financially against damage to their property and liability for injuries or property damage caused to others. While basic policies often exclude floods, earthquakes, and maintenance-related damage, these can be covered through add-ons or comprehensive plans. Despite its importance, awareness of home insurance remains critically low in India, with most homeowners underestimating risks or viewing premiums as unnecessary. Annual premiums for a ₹50 lakh property typically range between ₹2,000–₹5,000, a small fraction of potential rebuilding costs (₹20–50 lakhs). India faces severe natural disaster risks, with 59% of its landmass prone to earthquakes, 40 million hectares vulnerable to floods, and 8% of global cyclones affecting its coastlines. Standalone homes and high-value interiors particularly benefit from coverage, as apartment complexes often rely on collective building insurance that excludes personal interiors.

What is Home Insurance?

Home insurance is a financial security product designed to protect your house and belongings against unforeseen risks. These include natural calamities like floods, earthquakes, cyclones (covered via add-ons), and man-made mishaps such as theft, fire, or vandalism. The insurance ensures you don’t bear heavy out-of-pocket expenses during crises, offering financial relief when needed most. It safeguards both your physical property and financial future by covering structure, contents, liability, and add - ons. 

In India, where underinsurance is rampant, understanding policy nuances is critical. Most plans exclude pre-existing structural damage, maintenance issues, and high-value items like jewellery unless explicitly covered. Coastal regions (Odisha, Andhra Pradesh) and earthquake-prone states (Uttarakhand, Himachal Pradesh) particularly need specialized coverage due to higher disaster risks. Apartment dwellers should note that society insurance rarely covers interior modifications, making personal policies essential for false ceilings, modular kitchens, and expensive fixtures.

A comprehensive home insurance policy ensures that homeowners do not have to bear the financial burden of repairing or rebuilding their homes or replacing their valuable possessions after an unfortunate incident.

Types of Home Insurance Coverage

Not all homes are the same and neither are the risks or coverage needs. Here’s a breakdown of the different types of home insurance coverage you can choose from:

• Building/Structure Insurance: Covers the physical structure of the house, including walls, roofs, floors, and fixtures, against damage from natural disasters and accidental fire.
• Contents Insurance: Protects personal belongings inside your home, like furniture, electronics, jewellery, clothing, appliances, and gadgets from theft, fire, and accidental damage.
• Comprehensive Home Insurance: An all-in-one policy that covers both the structure and its contents. It usually comes with optional add-ons such as accidental damage, theft protection, alternative accommodation expenses, and personal accident cover for homeowners.

Table 1: Home Insurance Comparison

To help you quickly compare popular insurance options, here’s a table highlighting coverage types, sum insured, premiums, and add-on availability for top insurers.

Table 2: Coverage Types and Costs

This table below gives you a rough idea of average yearly premiums for different home insurance covers in India.

Benefits of Home Insurance

Home insurance can offer the following benefits:

• In cases where your home is damaged due to mishaps like fire, hurricane, hail, or any similar disaster, your home insurance provider will compensate you for rebuilding or repairing your house.
  • Rebuilding/repair costs for fire, cyclones, explosions, and natural disasters (floods/earthquakes via add-ons).
  • Example: A ₹50 lakh home damaged by fire can claim repair costs (e.g., ₹10 lakh) without personal financial strain.
  • Policies like Bharat Griha Raksha (IRDAI-mandated) include terrorism coverage and debris removal costs
• Another advantage that comes with a home insurance cover is protection for your personal belongings, like furniture, electrical items, as well as electronic appliances that you may lose due to theft, fire, or any natural calamity that occurs.
  • Coverage: Furniture, electronics, and valuables (jewellery requires safe storage).
  • Portable gadgets: Require "all-risk" add-ons (e.g., HDFC’s portable equipment cover)
• If in case your neighbour or any third party gets hurt, experiences loss or damage to their property because of you, your home insurance policy has got you covered. Though the amount being covered may differ depending upon your policy, home insurance will also help you with the legal expenses, in case there is an involvement of court.
  • Coverage: Medical bills and property damage for visitors (e.g., a guest’s injury).
  • Legal Costs: Includes court fees (typically ₹10–25 lakh coverage)
• In case your home is damaged and becomes uninhabitable, your home insurance policy will cover the cost of living elsewhere temporarily.
  • Coverage: Hotel stays/rent during repairs (up to ₹20,000/month for 3 – 6 months).
  • Condition: Applies only if the home is deemed uninhabitable.
• Additional benefits like burglary, natural calamity cover, and fire insurance
• Peace of mind for homeowners and tenants alike

How to Choose a Home Insurance Policy?

Selecting the right policy can feel overwhelming given the number of options available. This section offers practical tips to help you pick a home insurance plan that’s affordable and meets your specific needs:

• Compare plans for premiums, coverage, and claim settlement ratios. Evaluate premiums, coverage scope, and claim settlement ratios.
  • For instance, annual premiums for a ₹50 lakh property typically range between ₹2,500–₹8,000, but costs rise in high-risk areas like coastal regions. Prioritize insurers with claim settlement ratios above 90% (e.g., HDFC Ergo, ICICI Lombard) for reliability.
• Ensure add-ons like earthquake cover, jewellery insurance, and alternative accommodation are available if needed.
  • Tenants should opt for contents-only policies, while landlords need structure + liability coverage.
• Check the sum insured amount for both structure and contents. Calculate rebuilding costs using carpet area × construction rate per sq.ft. (e.g., ₹2,500/sq.ft. in metros). Ensure coverage is at least 80% of the property’s value to avoid underinsurance penalties.
• Read the fine print for limitations like termite damage, plumbing leaks, or unsecured jewellery. Policies like IRDAI’s Bharat Griha Raksha exclude pre-existing structural flaws but cover terrorism and debris removal.
• Use online calculators (e.g., SBI General’s Home Insurance Calculator) to estimate premiums and rebuilding costs accurately.

Home Insurance Claim Process

Making an insurance claim can feel daunting, especially during a crisis. Here’s a simplified process:

1. Inform your insurer within 24 hours of the incident via app, call, or email. For theft or burglary, file an FIR and submit a copy to the insurer.
2. Submit a formal claim with policy documents, FIR (if applicable), photos of damages, and invoices.
3. The insurer appoints a surveyor within 48 – 72 hours to assess damage and verify claims.
4. Upon approval, claim settlement is processed as per policy terms, usually within 7–15 working days. Opt for cashless repairs via network contractors or reimbursement for out-of-pocket expenses.

In disaster-prone regions, customizing your home insurance policy is essential for comprehensive protection. For example, in flood-prone areas like Kerala, it's wise to add storm surge riders to account for extreme weather events. In earthquake-prone states such as Uttarakhand, ensure that sub-limits on landslide coverage are removed to avoid gaps in protection. To simplify the claims process, it's also important to digitally store pre-damage photographs of your property and keep invoices for high-value items like electronics, artwork, or collectibles. When selecting an insurer, look for value-added benefits — Bajaj Allianz offers global coverage for belongings, while HDFC Ergo includes a ₹1 lakh personal accident cover even in its base plans. By combining practical precautions with insurer-specific advantages, you can secure optimal coverage without overspending.

FAQs on Home Insurance

Ques. Can I insure a rented property if I am a tenant?
Ans. Yes, while tenants cannot insure the building itself, they can take a contents insurance policy to protect their personal belongings inside the rented home. However, the building structure remains the landlord’s responsibility, and their insurance does not cover tenant's belongings

Ques. Does home insurance cover jewellery and valuable items?
Ans. Yes, but usually up to a certain limit. For high-value jewellery and collectibles, you might need to purchase an additional add-on rider or declare their value separately in your policy.

Ques. Will home insurance cover damage due to earthquakes?
Ans. Only if your policy includes earthquake coverage as a standard inclusion or as an add-on (e.g., "Natural Calamity Cover"). Tenants in seismic zones (e.g., Uttarakhand, Himachal Pradesh) must opt for this rider. 

Ques. Is theft or burglary covered under all home insurance plans?
Ans. Theft and burglary are typically covered under comprehensive home insurance policies or as an add-on in basic plans. Always check the coverage details before buying.

Ques. How is the premium for home insurance calculated?
Ans. Premiums are based on factors like sum insured, property location, property age, type of construction, contents value, and selected add-ons.

• Sum Insured: Value of belongings (e.g., ₹10 – 25 lakh for contents).
• Location: High-risk areas (flood/earthquake zones) cost 15–20% more.
• Add-ons: Jewellery/portable equipment riders increase premiums.