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How is Home Insurance Premium Calculated?

Home is where the heart is; we undyingly love our home don’t we? It is that one place where we keep returning to Irrespective of where we go. Apart from the innumerable memories of our childhood and togetherness it protects you from many natural calamities, hence there’s an immense need to protect your home. Additionally, you never know when you are away from home burglars may target your home and take away your hard earned valuables. These are some of the possible threats to your home other than terrorism and riots. It’s high time you secure your home from all the possible emergencies with Home Insurance Plan.

Now, that you know how important it is to buy a health insurance policy let’s take a look at home insurance premium estimate to get a fair idea of how a home insurance premium calculator works.

How is the Sum Insured & premium amount calculated for a policy?

The premium calculator for home insurance works on the basis of the mathematical calculations and guidelines laid by the Underwriting team. You can buy a home insurance for your old home and also for a newly bought residence. A lot A lot of home loan givers offer home insurance along with home loan where Sum insured could be the loan amount or the reinstatement value of the house. Typically, Sum insured is taken for the reinstatement value (cost of reconstruction of the house). However, there are products available in the market like the one with HDFC ERGO which also provides coverage for the Agreement value.

What are the factors which affect the premium for home insurance?

Your home insurers get your home back to how it was in case of any damage or loss happening due to fire or theft. However, there are several factors that determine the premium for home insurance. The below mentioned factors are a few determinants for deciding the premium.

Amount of coverage

Higher the coverage or Sum Insured higher the premium and vice versa. Home insurance premium for a flat worth 5 Cr. would definitely incur high premium as compared to a 1Cr.


If your residence is in a low lying area and probable to flood risks, then your premium might be a bit high. Your residence location plays an important role in deciding premium.

Deductibles, if any

If your home insurance plans involve deductibles then your premium amount depends upon deductible percentage. Higher the deductible lower the premium and vice versa.

Area of home & location

If your residence is located at a prime location then your structure value would be high leading to high premium.

Content Value

If your house contains a wide range of expensive furniture and electronics then your premium may get a little high. Additionally, if you choose to cover the jewellery and valuables then you can cover that too with an additional premium.

The above factors help in shaping the premium for home insurance.

To know more buy and explore home insurance plans and its benefits click here

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