With Natural Disasters On The Rise, Here’s Why Home Insurance Should be Considered

With floods, earthquakes, and landslides becoming more frequent across India, home insurance is now more important than ever. Yet, despite increasing risks, very few Indians have insured their homes.

Recently, parts of Delhi-NCR and Haryana experienced earthquake tremors, while several regions across the country are facing heavy rainfall, landslides and flood threats. In such situations, a strong home insurance policy can protect you from major financial loss if your home or belongings are damaged.

What Does Home Insurance Cover?

Home insurance helps you pay for the cost of damage caused by natural disasters like earthquakes, floods, cyclones, landslides, and forest fires. It also covers other events such as fires, lightning, riots, terrorism, theft (with conditions), and falling trees.

"There are two main types of home insurance: one that covers the structure of the house and another that covers the items inside the house, like furniture, electronics, and other valuables," says Manju Dhake, Senior Vice President at 1 Finance.

"You can also choose a comprehensive plan that covers both the house and its contents. Many insurance companies also offer extra coverage for things like jewelry, art, and temporary accommodation if you need to move out while your home is being repaired, added Manju Dhake.

What's Not Covered?

Home insurance does not cover damage caused by war, terrorist, depreciation or radiation. It also does not cover loss due to electronic equipment, normal wear and tear such as wall seepage or dampness, according to Policybazar.com.

Damage from short circuits is not included unless you buy extra coverage for it. In addition, it does not cover loss of income or any drop in the market value of your property.

How Much Does It Cost?

The cost of home insurance depends on the size and value of your property. For example, A basic plan costs between Rs 3,000 to Rs 5,000 annually. This can cover up to Rs 20 lakh for the home structure and belongings."

The insured amount is usually based on the cost of construction, not the land value. So, for a 1,000 sq. ft. home with a construction cost of Rs 4,000 per sq. ft., your home would be valued at Rs 40 lakh," said Deepak Uniyal, Co-Founder, Insurance Samadhan.

Insurance is available for individual houses, apartments, flats, and row houses. Even tenants can insure their household belongings.

Why Most People Still Don't Have It?

Despite India being one of the top five countries hit by natural disasters, only 1% of homeowners are insured. Experts say this is due to a lack of awareness and a belief that disasters won't happen to them.
"In 2024, India recorded 5.4 million displacements due to natural disasters, the highest figures in 12 years," according to a report by the Geneva-based Internal Displacement Monitoring Centre (IDMC).

Yet, home insurance is not being preferred by people.

Tips Before You Buy

• Check if the policy covers both structure and contents
• Choose coverage based on current construction cost
• For high-risk areas, consider add-ons like flood protection or temporary stay cover
• Talk to an insurance advisor if you're unsure about what plan to choose