What is the story about?
As India’s property market grows, so does the financial risk associated with homeownership and real estate investment. Yet, despite property being the largest asset for many Indians, insurance penetration remains low.
Experts say understanding and adopting property insurance is vital, not just for risk mitigation but also for long-term financial stability.
Why property insurance matters?
Property insurance safeguards homeowners and investors against unexpected losses such as fire, natural disasters, theft, or vandalism.
D Kishore Reddy, Chairman and Managing Director of Mana Projects, explains, “Property insurance provides financial protection against unforeseen damages. With increasing climate-related risks and urban expansion, insurance ensures faster recovery from loss and enhances asset value, especially in markets like India where homeownership is both an emotional and financial milestone.”
For investors, insurance also protects rental yields and maintains portfolio integrity.
Shorab Upadhyay, Managing Director of TRG Group, notes, “Insurance is a strategic measure to guard rental income, offset operating risks, and ensure portfolio integrity. Lenders frequently require coverage for financed assets, while builders' risk policies are crucial during construction periods.”
Common misconceptions
Despite its importance, several myths persist.
Many believe property insurance is expensive or that standard home insurance covers all risks.
Reddy points out, “Even urban homes face risks like fire, water leakage, or theft. Understanding exclusions, claim processes, and policy specifics is key to avoiding surprises during emergencies.”
Ankush Kaul, President – Sales, Marketing & CRM, Central Park, highlights another widespread misconception.
“Insurance only covers natural disasters. Comprehensive policies today extend to fire, theft, liability, and even rental income loss. Homeowners and investors are beginning to view insurance not as a cost, but as essential risk management," Kaul said.
Sahil Verma, COO of Shray Projects, adds, “Premiums are nominal relative to property value — for example, insuring a ₹1 crore property may cost less than ₹3,000 a year — but the protection it offers is significant.”
Types of property insurance in India
India offers various insurance products for different needs:
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Shorab Upadhyay emphasises, “These coverages are an essential layer of protection throughout the real estate life cycle, from purchase to occupation to construction.”
Adoption trends in urban vs semi-urban areas
Urban India is seeing higher adoption due to higher property values, home loan linkages, and increased risk awareness. Semi-urban regions, while currently lagging, are catching up thanks to digital platforms and targeted outreach by insurers.
Reddy says, “Education and incentivised policies could bridge the urban–semi-urban gap significantly in the coming years.”
Kaul adds, “In high-value urban hubs like Delhi-NCR, rising asset prices and climate-linked risks are driving stronger adoption, though semi-urban markets are still catching up.”
Factors influencing premiums
Premiums are calculated based on property value, location, age, construction type, occupancy, and coverage add-ons. High-risk zones or commercial properties typically attract higher rates.
Reddy explains, “Add-ons like coverage for jewellery, electronics, or rental income loss can affect costs. Insurers also assess security measures, maintenance, and claim history.”
Upadhyay adds, “Well-maintained and secure properties with sufficient coverage can minimise expenses while providing thorough protection against risks.”
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Experts say understanding and adopting property insurance is vital, not just for risk mitigation but also for long-term financial stability.
Why property insurance matters?
Property insurance safeguards homeowners and investors against unexpected losses such as fire, natural disasters, theft, or vandalism.
D Kishore Reddy, Chairman and Managing Director of Mana Projects, explains, “Property insurance provides financial protection against unforeseen damages. With increasing climate-related risks and urban expansion, insurance ensures faster recovery from loss and enhances asset value, especially in markets like India where homeownership is both an emotional and financial milestone.”
For investors, insurance also protects rental yields and maintains portfolio integrity.
Shorab Upadhyay, Managing Director of TRG Group, notes, “Insurance is a strategic measure to guard rental income, offset operating risks, and ensure portfolio integrity. Lenders frequently require coverage for financed assets, while builders' risk policies are crucial during construction periods.”
Common misconceptions
Despite its importance, several myths persist.
Many believe property insurance is expensive or that standard home insurance covers all risks.
Reddy points out, “Even urban homes face risks like fire, water leakage, or theft. Understanding exclusions, claim processes, and policy specifics is key to avoiding surprises during emergencies.”
Ankush Kaul, President – Sales, Marketing & CRM, Central Park, highlights another widespread misconception.
“Insurance only covers natural disasters. Comprehensive policies today extend to fire, theft, liability, and even rental income loss. Homeowners and investors are beginning to view insurance not as a cost, but as essential risk management," Kaul said.
Sahil Verma, COO of Shray Projects, adds, “Premiums are nominal relative to property value — for example, insuring a ₹1 crore property may cost less than ₹3,000 a year — but the protection it offers is significant.”
Types of property insurance in India
India offers various insurance products for different needs:
- Residential property insurance — covers homes and apartments against fire, theft, and natural calamities.
- Commercial property insurance — protects offices, warehouses, and retail spaces, often including rental income loss.
- Builder’s risk insurance — covers under-construction projects against fire, theft, and natural disasters.
- Landlord insurance — protects rental income and tenant-caused damage.
- Bundled policies – combine structure, contents, and liability coverage for comprehensive protection.
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Shorab Upadhyay emphasises, “These coverages are an essential layer of protection throughout the real estate life cycle, from purchase to occupation to construction.”
Adoption trends in urban vs semi-urban areas
Urban India is seeing higher adoption due to higher property values, home loan linkages, and increased risk awareness. Semi-urban regions, while currently lagging, are catching up thanks to digital platforms and targeted outreach by insurers.
Reddy says, “Education and incentivised policies could bridge the urban–semi-urban gap significantly in the coming years.”
Kaul adds, “In high-value urban hubs like Delhi-NCR, rising asset prices and climate-linked risks are driving stronger adoption, though semi-urban markets are still catching up.”
Factors influencing premiums
Premiums are calculated based on property value, location, age, construction type, occupancy, and coverage add-ons. High-risk zones or commercial properties typically attract higher rates.
Reddy explains, “Add-ons like coverage for jewellery, electronics, or rental income loss can affect costs. Insurers also assess security measures, maintenance, and claim history.”
Upadhyay adds, “Well-maintained and secure properties with sufficient coverage can minimise expenses while providing thorough protection against risks.”
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