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How Much Home Insurance Do You Need?

The incidences of natural disasters have increased sharply in India in the past 10 years, and the losses from the natural calamities are said to have crossed a billion-dollar mark. With this, there is a rise in the demand for home insurance policies. However, there are homeowners who want to know the scope of coverage provided in a home insurance policy. Read ahead to know how much home insurance you need.

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Need for Home Insurance

As per the recent World Bank estimate, nearly 600 or one-third of India’s districts are hazard-prone, risking the lives of people and properties worth millions. As per the National Disaster Management Authority of India, 60% of the Indian landmass is prone to earthquakes, and 8% is susceptible to cyclones, despite the fact, home insurance usually remains an under-selling product because the awareness among the people is relatively low in comparison to other insurance products in the market.

However, choosing the right home insurance plan with an adequate coverage amount can be confusing. That is why the Insurance Regulatory Development Authority of India (IRDA) has made it compulsory for all general insurance companies to offer the Bharat Griha Raksha Policy from April 1, 2021. The BGR policy provides financial coverage for several allied perils and fire-related risks to the insured property and its content.

People also read About Bharat Griha Raksha Policy

What Does Home Insurance Cover?

A home insurance policy offers protection against the loss or damage caused to the house and its assets. Some insurers also offer a comprehensive home insurance policy that protects your home in case of fire, terrorism, and natural calamities like earthquakes, floods, storms, etc.

A home insurance policy includes several essential features, such as:

  • Coverage for the building and its contents like furniture, electronics, jewellery, durables, clothes, utensils, etc. If you buy a policy covering only the infrastructure, it will pay for the reconstruction of the building structure in case of destruction. Moreover, if you buy coverage for personal belongings in your house, the insurer will pay for the loss or damage caused to items/assets in your home due to theft, burglary, fire, etc.
  • If you live in a rented house, you can purchase insurance for the contents of your house. If you have your own house, you can opt for a home insurance package policy that covers the building and the contents of the insured building. Generally, insurance companies provide alternate accommodation cover and covers the loss of rent. Therefore, buying a home insurance policy is a step towards protecting your wealth and should be a part of your finances.

How to Select the Right Sum Insured for a Property Insurance?

If you own a flat or an independent building, it becomes essential to buy home insurance online because it offers coverage benefits to the building structure and its content. It would be best to opt for a variant that provides ‘agreed value’. Independent house owners can opt for the variant that pays for the construction of the property as well.

To determine how much coverage amount you would need or the sum-insured amount that you should opt for depends on the structure, area, construction, and belongings in your house. Here is a simple formula that the insurers follow to assess the value of your property structure and its belongings:

Sum insured for the property structure =Built-up area X Cost of Construction per square foot (as of the date of policy purchase)

For instance, if the area of your property is 1000 square feet and the rate of construction decided by the insurance company is ₹ 500 per square foot, then the coverage amount or sum insured for your property structure will be ₹ 15 Lakh.

The sum assured for the content in the house is to be determined based on the Actual Cash Value (ACV) of the asset or the current market value minus the depreciation for the usage.

You can quickly compute the home insurance premium for your building structure and home content using the online home insurance calculator available at Moreover, you can compare multiple home insurance quotes online and choose one.

Long story short!

Whether you live in a rented apartment or own property, you must consider buying a home insurance policy to protect your house from unforeseen natural and man-made calamities. Buying the right type of home insurance would ensure the protection of your house against the numerous risks it is susceptible to.

Written By: PolicyBazaar - Updated: 07 November 2023
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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Reviews & Ratings

4.4 / 5 (Based on 120 Reviews)
(Showing Newest 10 reviews)
Bokaro, July 26, 2022
Coverage for natural calamity
I was looking for an insurance policy that provides me coverage for natural calamity. Since my house is located near a river and it floods my area in the rainy season. So i went on the Policybazaar website and particularly look for this coverage found the exact plan that provides this coverage.
Bilaspur, July 26, 2022
Premium Calculation
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Bikaner, July 26, 2022
Natural Calamity cover
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Amritsar, July 26, 2022
Enough coverage
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Bareilly, July 26, 2022
Nice customer service
I wanted to purchase a home insurance policy and a friend of mine suggested to purchase it from Policybazaar. I bought the policy and after that i had a confusion regarding exclusions so i called up Policybazaar customer care and they cleared out the confusion and i loved their customer service.
Ajmer, July 26, 2022
Qiuck claim
I purchased a home insurance policy recently. However, due to a natural calamity, my house was damaged as the pressure of the water because of flood broke the enterance door of my house. But the insurance plan that i bought got me covered and i as able to get the quickest claim possible.
Delhi, July 26, 2022
Natural calamities covered
I bought a home insurance policy recently. As i live near a river and in the rainy season, my area gets flooded so in order to protect my house and its contents, i purchased the insurance to get coverage for such natual calamities and i am tension free now.
Kolkata, July 26, 2022
Wide coverage
The home insurance plan that i purchased from policybazaar's website is a great plan that provides me coverage for not only the structure but also cover several expensive content of the home such as paintings, mobile phones, laptops, television, etc.
Ahmedabad, July 26, 2022
Suitable insurance plan
I purchased the group health insurance policy from Policybazaar website. First of all, i did not have to wander much online while lookig for a home insurance plan that fits my requirement and i found the suitbale home insurance plan by comparing different plans on the website.
Amritsar, June 09, 2022
Natural calamities covered
I bought a home insurance policy recently. As i live near a river and in the rainy season, my area gets flooded so in order to protect my house and its contents, i purchased the insurance to get coverage for such natual calamities and i am tension-free now.
  • Disclaimers+

    #Savings of 28% are based on the comparison between the highest and lowest premiums for a pucca building with sum insured of >₹ 1 crore at Delhi, for property age less than 5 years and policy term of 11 years.