Home Insurance Sum-Insured

Building vs contents — set both

Home insurance has two limbs. Building sum-insured = reconstruction cost (NOT market value, which includes land). Use ₹1,800–2,500/sqft for Tier-1 cities, ₹1,400–1,800 for Tier-2. Contents sum-insured = replacement cost of electronics, appliances, furniture and jewellery. Under-insurance triggers proportionate claim cuts: insure ₹10L on a ₹20L home, expect only 50% on any partial-loss claim.

Worked example

A 1,200 sqft Pune flat needs ~₹2,000/sqft × 1,200 = ₹24 lakh building cover. Contents: ₹3 lakh electronics + ₹2 lakh furniture + ₹5 lakh jewellery (declared, bank-locker option) = ₹10 lakh. Annual premium on a ₹34 lakh comprehensive policy (Bharat Griha Raksha) is ~₹2,500–4,000 — about 0.07% of cover. Mumbai/Chennai pay slightly more for flood add-on.

When to use this

• Bought a new flat — most home loans mandate property insurance
• Renovated or upgraded interiors (worth ₹2L+) — revise contents cover
• Moved to a flood/earthquake zone (Chennai, Mumbai, NCR seismic zone IV)
• Renter — only insure your contents, not the building

The standardised IRDAI Bharat Griha Raksha policy covers fire, flood, earthquake, terrorism and contents up to ₹10L without extra paperwork. For loan-tied insurance, the building cover often equals only the loan outstanding — top it up to full reconstruction cost.