Home insurance is more than building cover

Home insurance in India is still bought mostly because a lender asked for it. That origin shapes what people end up with: cover for the structure, arranged quickly, and very little thought given to the contents that make up the majority of most household claims.

The standard product, and what it changed

Since 2021, every general insurer in India has been required to offer a standardised home policy - Bharat Griha Raksha - alongside its own products. It covers the structure and, if you choose, the contents, against fire, natural catastrophe, theft and a defined list of perils. Because the wording is standard across insurers, it is a useful baseline for comparison even if you eventually buy something broader.

One feature of the standard policy is worth knowing: general contents are covered up to 20 per cent of the sum insured on the structure without needing an itemised declaration, which removes a common friction point for ordinary households.

Think in layers, not in one number

Structure cover pays to repair or rebuild the physical building. The right figure is the cost of rebuilding, calculated from carpet area and construction rate - not the market value of the flat, which includes land and location and has no bearing on what reconstruction costs.

Contents cover protects what is inside: furniture, appliances, electronics, clothing, kitchen equipment. Take an honest inventory once and the number is usually higher than expected. Replacing the contents of an ordinary three-bedroom home at today's prices is rarely a small figure.

Liability cover responds when someone else is injured or their property is damaged, and you are held legally responsible. Temporary accommodation cover pays your additional living costs if the home becomes uninhabitable after a covered loss - a benefit people rarely think about until they need somewhere to sleep.

The best home policy is built around how the home is actually used, not around the size of the loan against it.

Different occupants, different policies

An owner-occupier needs structure and contents. A tenant needs contents and liability but has no insurable interest in the structure. A landlord needs the structure plus loss of rent, and should not assume the tenant's policy protects the building. An apartment owner sits in a split arrangement, where the society covers common areas and the individual covers everything inside their own door.

That last case causes the most confusion. Society cover and individual cover are separate purchases with separate sums insured, and residents frequently assume they are protected by a policy they have never read.

Where claims go wrong

Underinsurance is the commonest problem. If the sum insured is materially below the true reinstatement cost, the average clause applies and the settlement is scaled down in proportion - even on a partial loss well within the sum insured. Insuring for half the rebuilding cost does not mean you are fully covered for small claims; it means every claim is reduced.

The second commonest is documentation. Invoices, photographs of rooms taken before anything happens, and a written inventory of high-value items turn a contested claim into a routine one. Take the photographs on a quiet weekend; they cost nothing and settle arguments later.