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How Are Home Insurance Premiums Calculated?

Home insurance helps you safeguard your investment against theft-related losses and other calamities like fires, explosions, and other natural disasters. It also covers your house and the belongings within, among other things.

If you thought homeowner’s insurance was pricey, you must reconsider. For instance, the five-year premium for a sum insured of Rs. 20 lakhs can cost you less than five thousand rupees.

Here are the main elements that affect the cost of your homeowner’s insurance.

Home insurance cost –

The area (in square feet), the cost of reconstruction (per square foot), and the anticipated value of the possessions can be calculated to determine this bonus. Structure and contents are the two main components covered by home insurance. The structure and the valuables can be insured by homeowners, while tenants can get content insurance to protect their belongings, such as furniture, clothing, and even jewellery.

Both parties also have the option to add terrorism-related risk insurance, and rent-related charges in case a different place to stay would be necessary. It can be easy to find the required plans online along with affordable home insurance quotes, as required by the insurer.

To determine your home insurance premium, follow these steps:

  1. Assess your assets: You must have the following details to ensure the construction of your home and your possessions:

Covered Structure:

  • Total area in square feet
  • Cost of construction expressed in unit price per square foot – building a home in India costs between Rs. 1800 and Rs. 2000 per sq. ft.
  1. The total cost of the items, including jewellery: Jewellery market value
  2. Calculate the premium using the online calculator: Start by checking the home insurance calculator online to know the premium.

For example – Fill out the information asked for in step one based on whether you own or rent the property. Below is a five-year premium payment example for a sum insured (building) of Rs. 21.6 lakh (a 1200 square foot space ‘x’ a construction cost of Rs. 1800 per square foot), plus content worth Rs. 5 lakh (including jewellery), plus terrorism protection, and rent for alternative housing.

Before filling out the specifics of your policy, you should know a few details:

  1. Your home’s general area concludes its built-up area.
  2. The cost of reconstruction can be covered by home insurance, not the home’s market value.
  3. It can be the expense incurred to replace damaged or lost structural components.
  4. Furniture and fixtures, consumer durables, clothing, kitchenware, jewellery, and other items may be among the contents of a home.
  5. The market value of the contents  is calculated to determine their valuation after depreciation.
  6. The most expensive jewellery can be covered up to a specified proportion of the contents’ total worth depending on the policy’s terms.

Home insurance can be a great strategy to safeguard yourself from dangers brought on by unfortunate events.

Insuring your property ensures that any loss or damage to the building or its contents won’t put you in a bad financial situation. The home insurance provider covers the expense of the repair or reimbursement. The cost of property insurance can be affected by several variables.


Knowing these characteristics can help you choose the appropriate premium and have enough insurance to keep you protected without breaking the bank when paying for your home insurance policy.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.