• Buying a house is indeed a significant accomplishment for most individuals in India. It is recommended to protect your home with the best property insurance policy as it will shield your residences from potential losses that could arise due to unexpected events. Nevertheless, when purchasing the home insurance policy, many individuals encounter challenges in determining the property insurance premium. There are several factors that you must consider before acquiring the home insurance policy, as it plays a crucial role in establishing the premium for property insurance. In this article, we will explain how you should proceed with checking and computing the property insurance premium.

Types of Property Insurance
Here are the three types of property insurance that HDFC ERGO provides:

1. Bharat Griha Raksha
   Bharat Griha Raksha is a standard home insurance policy that has been mandated by the Insurance Regulatory and Development Authority of India (IRDAI) for all insurers to offer starting April 1, 2021. The main features of this policy include coverage for your property and its contents for up to 10 years. It includes a waiver for under-insurance and an automatic escalation of 10% each year. Additionally, there is a built-in add-on cover for terrorism and rent for alternative accommodation.
   
2. Home Shield Insurance
   Home Shield insurance delivers comprehensive coverage for your assets for a duration of up to 5 years. HDFC ERGO Home Shield Insurance protects the actual value of the property as specified in the registered agreement of the property and also provides optional covers to tailor the plan to meet individual needs. This policy offers optional coverage such as rent for alternative accommodation, loss of rent, and portable equipment cover, among others.
   
3. Home Insurance
   A home insurance policy helps to minimize financial losses that might occur due to unexpected events such as floods, theft, fires, etc. This policy also includes various add-ons to cater to individual requirements.

Factors that Affect Premium of Property Insurance

• Geographical Location:
  The geographical location of the property aids the insurer in assessing environmental risks such as earthquakes, flooding, and more. For example, if your house is situated on hilly terrain or very near the coastline, the premium for your property may be higher.
  
• Safety Equipments:
  If your home is equipped with safety devices such as CCTVs, fire alarms, etc. , it may help in reducing the property insurance premium.
  
• Age of Building:
  Older buildings are more susceptible to losses or damage, therefore the insurer may impose a higher premium for properties located in these types of structures. Additionally, properties constructed with non-flammable materials will generally have lower premiums compared to those built with wood.
  
• Property Usage:
  The utilization of your property also influences its premium as it pertains to the level and type of risks that the insurer may encounter. Residential properties like apartments or houses typically have a lower premium when compared to commercial buildings.
  
• Claim Deduction vs Replacement Value:
  As per the replacement value coverage, the insurer provides a payout sufficient for replacing the destroyed items with new equipment. However, in other cases, the insurance provider delivers the payout after subtracting the depreciation. This way, these types of property insurance policies are comparatively cheaper. Therefore, you can select the one that fits your needs and requirements.

How to Calculate Premium
You may visit HDFC ERGO’s website and calculate insurance premium in four simple steps. An estimated amount can be computed that will be required to pay for property insurance. These insurance premium calculators are easy to use and very convenient.

Here are the steps to follow for calculating property insurance premium:
Step 1 – Enter the details of who you wish to insure.
Step 2 – Provide property details.
Step 3 – Select sum insured.
Step 4 – Compute premium.

• Conclusion
• The risk associated with maintaining a property in India is significant, as the country is susceptible to natural disasters like floods, earthquakes, etc. In this context, it is prudent not to overlook purchasing property insurance. The aforementioned factors will assist you in obtaining a clear understanding of how the premium for property insurance is determined. You can explore the HDFC ERGO home insurance policy which offers coverage for belongings up to Rs 25 lakhs.

• Disclaimer:
• The above information is for illustrative purposes only. For further details, please refer to policy wordings and prospectus before finalizing the purchase.