Home insurance: structure vs contents cover, and what a bank-arranged Bharat Griha Raksha policy covers

Rules and rates as of 19 October 2026.

When a home loan is sanctioned, the lender usually wants the property insured. Many borrowers sign a home insurance form at the branch, pay the premium, and never read the policy schedule. Then a pipe bursts or a fire guts the kitchen, and they find out what the policy actually covers.

This explainer covers the standard home policy, Bharat Griha Raksha: what "structure" and "contents" mean in it, how the sum insured is worked out, and what to look for in a policy arranged through your bank. Whether a lender can make you buy insurance, and from whom, is covered in our separate guide on insurance sold with home loans.

What Bharat Griha Raksha is

Bharat Griha Raksha is a standard home insurance product. The insurance regulator, IRDAI, set it as a standard product, and general insurers sell it under their own names with largely the same text. We could not open the IRDAI guidelines themselves, because IRDAI's site blocks automated readers. So everything below is taken from three insurers' policy wordings, each filed with a product code (UIN): The New India Assurance Company, Universal Sompo General Insurance and Go Digit General Insurance. On the points used here, they read the same.

The policy covers physical loss or damage from listed events, including fire, explosion, lightning, earthquake, storm, cyclone and flood, some cases of subsidence and landslide, impact damage, riot, strike and malicious damage, bursting of water tanks and pipes, and terrorism under a separate clause. Theft is covered only in a narrow case: within seven days of one of these events. This is not a burglary policy.

Structure cover: the "Home Building"

The wording calls the structure "Your Home Building": a residential unit with an enclosed structure and a roof. It includes fixtures and fittings permanently attached to floors, walls or roof, such as sanitary fittings and electrical wiring. Where they exist, it also includes the garage, parking areas, compound walls, gates, internal roads and fixed water tanks. It does not include anything inside that is not fixed.

The sum insured for the building is the cost of construction, not the market price of your flat. The policy defines it as carpet area in square metres × the rate of cost of construction at the start date. The price you paid includes land, the builder's margin and location, and none of that is rebuilt after a fire.

Three features make this cover simpler than older fire policies:

• No underinsurance cut. Clause I says underinsurance does not apply. If the declared sum insured turns out lower than the real value, that alone does not reduce a claim.
• Automatic escalation. For policies longer than one year, the building sum insured rises by 10% a year on each anniversary, with no extra premium, up to 100% of the starting amount. For a one-year policy it builds up daily at one 365th of 10%.
• Repair, not depreciation. For partial damage, the insurer pays the cost of repairing the building to a condition substantially the same as before. New India's wording does not mention depreciation for the building.

Contents cover, and the 20% catch

"General Contents" means household items such as furniture and electronic goods. "Valuable Contents" means jewellery, silverware, paintings and works of art.

The policy has a built-in cover for general contents equal to 20% of the building sum insured, up to ₹10 lakh. The condition matters: the wording says this applies only if you have opted for both Home Building and Home Contents cover. A policy with building cover alone does not cover your furniture or TV.

Valuables are not covered at all unless you buy the optional valuables cover. Items are covered at an agreed value; the insurer waives a valuation certificate where the valuables sum insured is up to ₹5 lakh and no single item exceeds ₹1 lakh.

Two other built-in features: rent for alternative accommodation while the home is unfit to live in, to the extent you declare, for up to three years; and personal accident cover of ₹5 lakh per person if an insured event that damages the home also causes the death of you or your spouse.

Worked example: a 60 sq m flat

Assume a flat with a carpet area of 60 sq m (about 646 sq ft) and an illustrative construction cost of ₹25,000 per sq m. Both figures are assumptions; your insurer will apply its own rate.

Building sum insured = 60 × ₹25,000 = ₹15,00,000. If you also take contents cover, built-in general contents = 20% × ₹15,00,000 = ₹3,00,000, well under the ₹10 lakh cap.

On a five-year policy, the building sum insured rises by 10% of the starting ₹15 lakh, that is ₹1,50,000, on each anniversary. We have read "10% per annum" as 10% of the starting amount each year, since the cap is set at 100% of that amount; ask your insurer to confirm.

Policy year	Building sum insured	Built-in general contents (both covers taken)	Built-in general contents (building only)
Year 1	₹15,00,000	₹3,00,000	₹0
Year 2	₹16,50,000	₹3,00,000	₹0
Year 3	₹18,00,000	₹3,00,000	₹0
Year 4	₹19,50,000	₹3,00,000	₹0
Year 5	₹21,00,000	₹3,00,000	₹0

The contents column stays at ₹3 lakh because the wording ties it to the building sum insured, without saying whether escalation feeds through; we have kept it flat. Now suppose your furniture, appliances and electronics would cost ₹4,50,000 to replace. Even with both covers, the built-in ₹3,00,000 leaves a gap of ₹4,50,000 − ₹3,00,000 = ₹1,50,000, unless you declare a higher contents sum insured and pay the extra premium. With building cover alone, the whole ₹4,50,000 is uncovered.

What a bank-arranged policy may and may not cover

If the home is mortgaged to a bank, the policy schedule will show an "Agreed Bank Clause" with the bank's name, and the bank's terms are added as an extra clause. We could not read a standard text for that clause; it is attached separately to each policy. What it does show is that the lender has an interest in a claim on the property it has financed.

The lender's interest is the building, which is its security. Whether your bank-arranged policy also covers contents, valuables or alternative accommodation depends entirely on what is printed in your schedule. Check these lines:

• Which covers are ticked: Home Building, Home Contents, Valuable Contents.
• The building sum insured, and the carpet area and rate it is based on. A wrong carpet area matters: New India's wording works out the building claim on the actual area, capped at the area declared.
• The policy period. A one-year policy needs renewing, and the wording says renewal is not automatic.
• The Agreed Bank Clause and the bank named in it, so you know who will be involved in a claim.

If you cancel, New India's wording refunds proportionate premium for the unexpired period on a policy of up to one year where no claim has been made, with a separate rule for longer policies. That wording does not mention a free-look period.

For a flat, ask your society or association whether it insures the building as a whole. If it does, find out what that policy covers before you decide what your own needs to. An insurance adviser or your insurer's grievance cell can help with any clause you are unsure of.