A Complete Guide to Property and Asset Insurance in India

Published on September 02, 2026 | 11 min read

Here’s everything you need to know about property and asset insurance in India, its types, coverage, and exclusions.

Key Takeaways

Property and asset insurance is a type of insurance that protects your home, commercial property, and, in some cases, its contents against financial loss arising from covered risks.
There are different types of property insurance, such as homeowners’ insurance, renters’ insurance, commercial property insurance, fire insurance, and public liability insurance.
Property and asset insurance covers damage to or loss of property arising from covered events, such as fire, theft, natural disasters, and other events specified in the policy terms and conditions.
Standard property insurance policies do not cover deliberate damage, war, or radiation. Policyholders may need to pay claim processing fees and purchase specific add-ons for electronic equipment or related damage, depending on the policy.

While India boasts a wide variety of terrains and climates, this geographical diversity also makes the nation vulnerable to natural disasters such as floods, landslides, cyclones, and avalanches, resulting in significant financial and property losses.

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To protect your home and commercial property from natural disasters and other risks, you can buy property and asset insurance in India.

Let’s understand in detail what property and asset insurance is, its types, coverage, and exclusions.

What Is Property Insurance?

Property insurance is a type of insurance policy that compensates property owners or renters for financial losses and liabilities resulting from theft, fire, natural disasters, and other covered events. It protects the insured against sudden and significant financial loss by transferring the financial risk associated with property damage or loss from the property owner to the insurance provider in exchange for a regular premium.

A property insurance policy provides coverage up to a maximum amount, i.e, the sum insured, when a covered event occurs resulting in financial damage, loss, or third-party liability. Some policies may carry a voluntary or mandatory deductible, which requires the insured to pay a predetermined amount before the insurance coverage applies.

A property insurance policy carries certain exclusions such as normal wear and tear, war-related damages, and other expenses that are not covered or compensated by the insurer.

Types of Property Insurance in India

The following are the different types of property insurance you can buy based on your property type and protection requirements.

Type of Policy	What It Protects	Suitable For
Homeowner's Insurance	Covers damages to the physical structure of the house, such as walls, roof, foundation, and internal contents.	Individuals who own residential houses, villas, or apartments.
Renter's Insurance	Compensates for the loss or damage of personal belongings, valuables, and electronics, if covered, kept inside a rented property.	Tenants living in rented apartments or houses.
Commercial Property Insurance	Covers damages to office buildings, machinery, inventory, and equipment.	Businesses owning offices, retail shops, and warehouses.
Fire Insurance	Covers property and assets damaged or destroyed by accidental fires, lightning, or explosions.	Both residential and commercial property owners exposed to fire-related risks.
Public Liability Insurance	Covers third-party injuries or property damage occurring on your premises.	Business owners, societies, and commercial organisations open to public visits.

What Does Property Insurance Cover?

The following are the damages and risks covered by most property insurance policies.

Building Structure

A standard property and asset insurance policy covers damage to the property’s physical structure, walls, roof, and permanent fittings caused by covered risks.

Household Contents

Commercial property and homeowners’ insurance policies provide coverage for internal contents such as furniture, electronic appliances, machinery, inventory, and equipment.

The fire insurance policy compensates for the property damage caused by accidental fires, forest fires, and unexpected explosions.

Natural Disasters

Most property insurance policies cover financial loss and damages incurred due to natural disasters such as earthquakes, storms, floods, cyclones, landslides, and tsunamis.

Impact Damage

Most insurance providers offer impact damage coverage, which compensates for damage incurred due to collisions or impacts from external objects, such as vehicles, falling trees, or aircraft.

Water Damage

The policy may cover water damage caused by the bursting or overflowing of water tanks or pipes, as well as sprinkler leakage.

Man-Made Perils

Some policies provide coverage for property damage resulting from riots, strikes, and acts of terrorism.

Burglary and Theft

Loss of contents due to theft and burglary is usually covered under a property insurance policy as standard protection or as an extension.

Third-party injuries

Public liability property insurance pays medical bills or legal fees incurred if a visitor is injured or their property is damaged on the insured’s premises.

What Is Not Covered by Property Insurance?

The following damages and risks are not covered under the property insurance policy.

Intentional Damage

The property insurance policy does not compensate for intentional damage caused to the house by the owner or occupants.

Damage Due to Poor Maintenance

Financial losses and damages arising from poor maintenance of the house and its furniture are not covered by the insurer. For example, damage to furniture due to pest infestation is not covered.

War and Hostilities

Financial losses and damages caused by war, invasions, or war-like operations are not covered under property insurance.

Contamination and Radiation

The policy does not cover property damage or loss of assets caused by radioactive contamination.

Expensive Items

Standard property insurance does not cover expensive jewellery or artefacts unless you opt for an extension.

Claim Processing Fees

The policy does not compensate for expenses incurred during the claim submission process.

Normal Wear and Tear

Expenses and damages incurred due to routine wear and tear are not covered under the policy.

Property Insurance vs Home Insurance: What's the Difference?

While many people use the terms 'home insurance' and 'property insurance' interchangeably, they are not the same. Home insurance is actually a specific type of property insurance, which is a much broader category.

Feature	Property Insurance	Home Insurance
Definition	A broader term for policies covering various types of physical assets such as commercial buildings, factories, and homes.	A sub-type of property insurance that offers protection to private residences.
Target Audience	Homeowners, business owners, landlords, and commercial renters.	Individual homeowners or residents living in the home.
Scope of Coverage	Covers damages to physical structures, commercial inventory, machinery, and equipment.	Covers the house structure and personal belongings if covered under the policy.
Liability Protection	Typically focuses on commercial-grade and third-party business liabilities.	Covers personal liability if a visitor is injured on the premises.

What is the Bharat Griha Raksha Policy?

The Bharat Griha Raksha policy is a standard home insurance policy launched by the Insurance Regulatory and Development Authority of India (IRDAI) in 2021. It replaced the older and more complex home insurance policies, such as Standard Fire and Special Perils, with simple language and charged an affordable premium.

Bharat Griha Rakhsha policy covers physical damage to the building’s structure caused by events such as fires, water damage, theft, natural disasters, explosions, and acts of terrorism. The policy also protects internal contents such as furniture, electronics, and appliances, with coverage up to 20% of the building sum insured.

The policy also pays for additional expenses, such as up to 5% of the claim amount for an architect, surveyor, and consulting engineer, and up to 2% of the claim amount for expenses incurred in removing the debris from the location.

Features of Bharat Griha Raksha Policy

The following are the features of the Bharat Griha Raksha policy.

Auto-Escalation

Under the Bharat Griha Raksha policy, the sum insured for the insured building automatically increases by 10% annually for long-term policies without any premium increase.

Optional Add-ons

The policy allows policyholders to customise and extend their coverage by opting for add-ons. For example, policyholders can insure valuable items such as jewelry or artwork based on their fixed value.

The Bharat Griha Raksha policy also offers an optional personal accident cover of ₹5 lakh per person if a covered peril results in the death of the policyholder or their spouse.

No Underinsurance

The policy does not charge standard underinsurance penalties, ensuring the policyholders receive fair payouts as per the policy terms.

Factors Affecting Premium on Property Insurance in India

The following factors affect property insurance premiums in India.

Location and Environment

Properties located in high-risk zones prone to natural disasters, such as floods, earthquakes, or cyclones, or those in areas with high crime rates, may be charged higher insurance premiums.

If a property is located near emergency services, such as fire stations, it may be charged lower premiums since proximity to these services helps prevent excessive damage to the property, which may reduce claim payouts.

Construction Material and Type

Buildings are categorised by the materials used in their construction. Fire-resistant buildings constructed with reinforced concrete may be charged a lower premium compared to those built using combustible materials, such as wood.

Age of the Property

Older buildings and structures may be charged higher premiums due to the increased risk of damage arising from deterioration and old electrical and plumbing systems.

Sum Insured and Value

If the policyholder opts for a higher sum insured, the property insurance premium will also be higher due to the larger potential payout at the time of a claim.

Safety and Security Systems

If the structure or building has adequate security with surveillance cameras, fire extinguishers, smoke alarms, and sprinkler systems, these installations may lower the premium charged on property insurance.

Occupancy Type

Whether the property is used as a commercial or residential space significantly affects the premium charged for the policy. Commercial properties such as factories and plants may be charged higher premiums due to high operational risks, while residential properties may be charged lower premiums due to low chances of significant and frequent payouts.

Property and asset insurance is a specialised insurance policy that protects your property and its belongings against financial losses arising from fire, flood, earthquake, theft, and other covered events.

Choose a type of property insurance based on your property types and risk exposure to ensure adequate protection. If a covered event occurs resulting in financial loss, you can file a claim through the insurer's official website or app and submit all necessary documents to ensure faster claim processing.

Before buying property insurance, compare the coverage, exclusions, sum insured, and premium, and understand the claim process to select a policy that aligns with your risk exposure.

FAQs

What is property insurance in India?

Property insurance is a type of insurance that protects your home, commercial property, building, and belongings, if covered, against financial losses arising from fire, natural disasters, theft, and other covered events.

What does property insurance cover?

Property insurance covers damage to the property, such as a house, building, and household contents, caused by covered events and risks.

Does home insurance cover floods and earthquakes?

Yes, a standard home insurance policy covers financial loss caused by floods and earthquakes.

Does property insurance cover theft?

Yes, most property and home insurance policies compensate for financial losses resulting from theft or burglary.

What factors affect the premium on property insurance in India?

Factors such as property location, construction type, property age, sum insured, security systems, and occupancy type significantly affect the premium charged on property insurance in India.

How is home insurance calculated?

Home insurance is calculated based on its reconstruction value instead of its market value, the value of the furniture and other contents you want to insure.

Can tenants buy home insurance?

Yes, tenants can buy home insurance, also known as renters insurance, to protect their belongings and household contents, even though they do not own the house.

Does society insurance cover my flat and belongings?

No, society insurance does not cover an individual’s flat and its belongings. It only covers shared assets, common areas, outer building structure, and third-party liabilities.

Is home insurance the same as home loan insurance?

No, home insurance and home loan insurance are two different policies. Home insurance protects your property and belongings, while home loan insurance covers your outstanding loan balance if you cannot repay it due to events like disability, critical illness, death, or job loss.

About Author

Mariyam Sara

Sub-Editor

holds an MBA in Finance and is a true Finance Fanatic. She writes extensively on all things finance whether it’s stock trading, personal finance, or insurance, chances are she’s covered it. When she’s not writing, she’s busy pursuing NISM certifications, experimenting with new baking recipes.