What does a standard home insurance policy cover in India?

A Standard Fire and Special Perils Policy (SFSP) in India covers: fire, lightning, explosion, aircraft damage, storm/cyclone/typhoon, flood/inundation, impact damage, subsidence/landslide, bursting of water pipes, missile testing, and riot/strike/malicious damage (RSMD). Earthquake and terrorism are NOT covered under the standard policy — they are separate add-ons. Wear and tear, war, intentional damage, and consequential losses are permanently excluded.

Is home insurance based on market value or reconstruction cost?

Home insurance sum insured is based on RECONSTRUCTION COST, not market value. Land value is never insured since land cannot be destroyed by fire or flood. Reconstruction cost in India ranges from ₹1,000-2,500 per sqft depending on construction type (RCC, semi-pucca, kutcha) and city. Under-insuring triggers the 'average clause' where the insurer reduces claim payouts proportionately. For example, if reconstruction cost is ₹30L but SI is only ₹15L, the insurer pays only 50% of any claim.

Do I need home insurance if I live in a rented apartment?

Yes, but you need CONTENTS insurance, not structure insurance. Your landlord's policy covers the building structure — it does NOT cover your belongings (furniture, electronics, jewelry, clothing). A contents-only policy costs ₹500-₹1,500/year for ₹5-10 lakh coverage and protects against fire, flood, storm, and theft (with burglary add-on). This is one of the most affordable insurance products in India and well worth the cost.

Is earthquake covered under home insurance in India?

No. Earthquake is NOT covered under the standard fire policy. It must be added as a separate add-on at approximately 0.03% of sum insured per year. For a ₹25 lakh SI property, earthquake add-on costs about ₹750/year plus GST. Earthquake cover is highly recommended in seismic zones III-V which includes Delhi-NCR, NE India, Himalayas, parts of Gujarat, Maharashtra, and Karnataka. Only about 3% of Indian homes are insured against earthquake despite high seismic risk in many areas.

Home Insurance Calculator India — FY 2025-26

Q: How much does home insurance cost in India?

Home insurance in India costs approximately 0.05% to 0.15% of the sum insured per year, before 18% GST. For a 1,200 sqft RCC apartment with ₹21.6 lakh structure SI and ₹5 lakh contents SI, annual premium is approximately ₹2,100-₹3,500 including GST. Premium varies by construction type (RCC is cheapest), location (metro cities are slightly higher), and add-ons selected (earthquake, terrorism, burglary). Multi-year policies get 10-15% discount.

Calculate your home/property insurance premium based on reconstruction cost, contents value, and location. Compare owner, renter, and landlord coverage options. Includes earthquake & terrorism add-ons, 18% GST, and multi-year discounts.

Estimate your home insurance premium based on reconstruction cost, contents, and location

Property type

Determines which coverage you need

Construction type

RCC = lower risk = lower premium

Built-up area

sqft

Total built-up area of the property

Reconstruction cost per sqft

₹

RCC: \u20B91,500-2,500 | Semi: \u20B91,000-1,500 | Kutcha: \u20B9500-800

Contents value (furniture, electronics, jewelry)

₹

Total value of movable assets inside the home

Location

Metro cities have slightly higher rates

Policy term

Multi-year policies get 10-15% discount

Add-ons

Earthquake cover (+0.03% of SI)Terrorism pool cover (+0.008% of SI)

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How to Use This Calculator

Premium Estimate tab

Enter your property type (self-occupied, rented out, or rented), construction type (RCC, semi-pucca, or kutcha), built-up area in sqft, and reconstruction cost per sqft. The calculator computes your structure sum insured, adds contents value, applies location-based premium rates, factors in optional add-ons (earthquake, terrorism), and shows the total premium with 18% GST. Multi-year policies (2-3 years) get 10-15% discount.

What's Covered? tab

Review the complete list of covered perils under a Standard Fire and Special Perils Policy (SFSP), optional add-ons with their costs, and permanently excluded perils. Toggle each add-on to see the annual cost based on your structure sum insured. Use this tab to decide which add-ons are worth the extra premium.

Home vs Contents tab

Compare the annual premium for three scenarios: owner-occupier (structure + contents), renter/tenant (contents only), and landlord (structure only). See the monthly cost of each option and understand who is responsible for insuring what in a rental arrangement.

Share your result

All inputs are encoded in the URL. Click Share to send your exact insurance estimate to a family member or financial advisor, or bookmark it for renewal time.

The Formula

Home insurance premium in India is based on the sum insured (reconstruction cost, not market value), construction type, location, and add-ons selected.

Structure Sum Insured (SI):
Structure SI = Built-up Area (sqft) × Reconstruction Cost per sqft

Reconstruction cost benchmarks (FY 2025-26):
RCC frame: &rupee;1,500-2,500/sqft | Semi-pucca: &rupee;1,000-1,500/sqft | Kutcha: &rupee;500-800/sqft

Structure Premium:
Structure Premium = Structure SI × Base Rate
RCC: 0.05-0.07% | Semi-pucca: 0.075-0.10% | Kutcha: 0.11-0.15% (varies by location)

Contents Premium:
Contents Premium = Contents SI × Contents Rate (0.08-0.12%)

Add-ons (optional, as % of Structure SI):
Earthquake: ~0.03% | Terrorism: ~0.008% | Enhanced flood: ~0.025% | Burglary: ~0.02%

Multi-year discount:
2-year policy: 10% discount | 3-year policy: 15% discount

GST:
GST = Total Premium × 18%

Total Premium:
Total = (Structure Premium + Contents Premium + Add-ons) × (1 − Multi-year Discount) + GST

Important: Sum insured is based on reconstruction cost, NOT market value. Land value is never insured. Under-insuring triggers the "average clause" where claims are proportionately reduced.

Example

Priya — 3BHK apartment in Bengaluru, RCC construction, 1,500 sqft

Priya (38) owns a 3BHK apartment in Bengaluru (metro city). It is RCC frame construction with 1,500 sqft built-up area. She estimates reconstruction cost at &rupee;2,000/sqft. Her contents (furniture, electronics, jewelry) are worth &rupee;8,00,000. She wants earthquake and terrorism add-ons.

Step 1: Calculate Sum Insured

Built-up area1,500 sqft

Reconstruction cost&rupee;2,000/sqft

Structure SI&rupee;30,00,000

Contents SI&rupee;8,00,000

Total SI&rupee;38,00,000

Step 2: Calculate Premium

Structure premium (0.07% of &rupee;30L)&rupee;2,100

Contents premium (0.12% of &rupee;8L)&rupee;960

Earthquake add-on (0.03% of &rupee;30L)&rupee;900

Terrorism add-on (0.008% of &rupee;30L)&rupee;240

Total base premium&rupee;4,200

Step 3: Add GST

Premium before GST&rupee;4,200

GST @ 18%&rupee;756

Total annual premium&rupee;4,956

Priya insures her &rupee;38L property for less than &rupee;5,000/year — that is just &rupee;413/month for protection against fire, flood, storm, earthquake, and terrorism. A single kitchen fire or water pipe burst can cause &rupee;2-10L damage. Her premium is 0.13% of the total sum insured.

Key Concepts

Reconstruction cost vs market value

The most common mistake in home insurance is confusing market value with reconstruction cost. Your property's market value includes land price — but land cannot be destroyed by fire or flood. Insurance covers only the structure.

Reconstruction cost in India ranges from &rupee;1,000 to &rupee;2,500 per sqft for residential properties. A 1,200 sqft apartment in Delhi that has a market value of &rupee;1.5 Cr may have a reconstruction cost of only &rupee;25-30L. The insurance SI should be &rupee;25-30L, not &rupee;1.5 Cr.

Average clause: If your actual reconstruction cost is &rupee;30L but you insure for only &rupee;15L, the insurer will treat you as 50% insured and pay only 50% of any claim — even a &rupee;1L claim will be settled at &rupee;50,000.

Standard Fire and Special Perils Policy (SFSP)

All general insurers in India offer coverage based on the Standard Fire and Special Perils Policy approved by IRDAI. The base coverage is identical across insurers — the difference is in add-ons, claim settlement ratio, and service quality.

Standard perils covered: fire, lightning, explosion, aircraft damage, storm/cyclone, flood/inundation, impact damage, subsidence/landslide, bursting of water pipes/tanks, missile testing, and RSMD (riot, strike, malicious damage).

NOT covered in standard policy: earthquake (add-on), terrorism (add-on), burglary/theft (separate add-on or policy), wear & tear, war, nuclear perils, and intentional damage.

Earthquake risk in India

India is divided into 4 seismic zones (II-V). Zone V (very high risk): entire NE India, J&K, Himachal Pradesh, Uttarakhand, parts of Gujarat. Zone IV (high risk): Delhi-NCR, parts of Maharashtra, Bihar, and UP. Zone III (moderate): most of peninsular India.

Despite this, less than 3% of Indian homes have earthquake insurance. The Bhuj earthquake (2001) caused &rupee;13,000 Cr in losses. The Nepal earthquake (2015) damaged property across Bihar and UP.

Earthquake add-on costs only ~0.03% of SI per year. For a &rupee;25L property, that is &rupee;750/year — trivial compared to the potential loss.

Comparing insurers: HDFC ERGO, Bajaj, ICICI Lombard

While the standard fire policy coverage is identical, insurers differ in:

HDFC ERGO HomeShield: Bundled householder package with structure + contents + personal accident. Claim settlement ratio ~98%. Online purchase available.
Bajaj Allianz Home Insurance: Offers structure, contents, and liability in one policy. Good network of surveyors. ~97% settlement ratio.
ICICI Lombard Home Protect: Comprehensive package with rent-for-alternative-accommodation cover. ~96% settlement ratio.
New India Assurance: Government-owned. Competitive rates. Largest network. ~95% settlement ratio.
United India Insurance: Government-owned. Good for Tier-2/3 cities where private insurers have less presence.

Premium difference between insurers is typically 10-20%. Prioritize claim settlement ratio and surveyor network over marginal premium savings.

FAQ

How much does home insurance cost in India? ▼

Home insurance in India is extremely affordable compared to the coverage it provides. Annual premium typically ranges from 0.05% to 0.15% of the sum insured, plus 18% GST. For a standard 1,200 sqft RCC apartment with &rupee;21.6L structure SI and &rupee;5L contents SI, the annual premium is approximately &rupee;2,100-3,500 including GST. That is less than &rupee;300/month. Premium is lower for RCC structures (lowest risk), higher for semi-pucca and kutcha. Metro cities have slightly higher rates than Tier-2/3 cities. Multi-year policies (2-3 years) attract 10-15% discount.

What is the "average clause" in home insurance? ▼

The average clause is triggered when you under-insure your property. If your actual reconstruction cost is &rupee;30L but your sum insured is only &rupee;15L, you are 50% insured. Under the average clause, the insurer will pay only 50% of any claim — even a &rupee;2L kitchen fire claim will be settled at only &rupee;1L. To avoid this, ensure your SI matches the full reconstruction cost. Use current construction rates (&rupee;1,500-2,500/sqft for RCC in 2025-26). Do NOT use the original purchase price or market value (which includes land). Revisit SI every 2-3 years as construction costs increase.

Do I need separate home insurance if my housing society has a policy? ▼

Yes, in most cases. A housing society's master policy typically covers only the common areas (lobby, stairs, parking, external walls) and the basic building structure. It does NOT cover: (1) interior modifications you have made (false ceiling, modular kitchen, tiles, paint), (2) your personal contents (furniture, electronics, jewelry, clothing), (3) improvements and fixtures inside your flat. You need a separate householder policy covering your flat's interior structure value and contents. The society policy and your individual policy together provide complete coverage.

Is 18% GST applicable on home insurance premium? ▼

Yes. All general insurance premiums in India attract 18% GST (9% CGST + 9% SGST) under HSN code 997131. This applies to fire, home, property, and householder policies. The GST is charged on the total premium including all add-ons. For residential property, this GST cannot be claimed as Input Tax Credit (ITC). For commercial property insurance, businesses can claim ITC on the GST paid. The GST council has discussed reducing insurance GST rates, but as of FY 2025-26, the rate remains 18%.

What documents do I need to claim home insurance? ▼

For a home insurance claim, you need: (1) FIR / police report (for theft, malicious damage, or riot), (2) Fire brigade report (for fire claims), (3) Photographs of the damage before repairs, (4) Repair estimates from contractors, (5) Bills/receipts for damaged contents (purchase invoices, warranty cards), (6) Municipal/local authority certificate (for flood, earthquake damage). IRDAI mandates insurers to appoint a surveyor within 72 hours and settle claims within 30 days of survey completion. Keep a home inventory with photographs and purchase receipts of valuable items — this dramatically speeds up contents claims.

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