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How to Calculate Property Insurance Premium

Posted on 08 Jul 2021
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Property insurance protects the property owners from incurring huge financial losses in case of an unforeseen mishap, such as fire, theft, storm, lightning, flood etc. It covers any damage to the insured property and its contents, including clothes, jewellery, furniture, and electronic appliances. A property insurance policy can be purchased for residential as well as commercial properties.

Factors influencing property insurance premium calculation

Factors which affect Property Insurance Premium

As with any other insurance, premium for a property insurance plan depends upon the coverage it is providing. Below are the factors which affect the property insurance premium:

  • Type of property

    As mentioned above, property insurance can be purchased for residential as well as commercial properties. However, since commercial properties are costly in price and more exposed to risks, premium for commercial property insurance is usually higher than residential housing property insurance.

  • Value of the Structure

    Another factor that plays a crucial role in determining the property insurance premium is the value of the property that needs to be insured. The value of a property is usually calculated on the basis of its super built-up area, rate of construction (per square feet), and the geographical location. Two properties of same sizes can have different values and hence, their insurance premium can differ.

  • Value of the contents

    A comprehensive property insurance plan also provides coverage for the contents of the property along with the structure. Hence, the value of the contents of a property also play a role in determining its insurance premium. Contents of a housing property may include jewellery, electronic appliances, furniture etc. Whereas, for commercial properties, it can be inventory, machines, raw materials etc.

  • Value of Stocks

    Value of stock is your goods or merchandise value. This may be finished goods, Semi- finished goods, stock in process, stock invoiced and ready for dispatch, raw materials, packaging material or stock held in trust for which insured is responsible. It also comprises a stock in open in the insured premises.

  • Sum Insured

    Sum insured is the maximum amount of coverage offered by a property insurance policy. The higher the sum insured; the higher will be the policy premium. It’s important for the property owners to opt for the right sum insured to avoid being underinsured or over insured.

How to calculate property insurance premium?

You can calculate your property insurance premium by using an online fire insurance premium calculator. These online calculators are designed to provide an approximate amount you need to pay for insuring your property.

Property insurance calculators are easy and convenient to use. All you need to do is enter some basic details of your property, such as its type, total built-up area, value of structure, value of the contents, and the value of stocks . Your property insurance premium will be calculated and displayed within seconds.

To Conclude

A little diligence and careful assessment can help you get the best insurance plan for your property. With many insurance companies offering property insurance in India, it’s prudent to compare various offerings and opt for the one that provides maximum coverage at an affordable premium. You can also choose to buy property insurance online to get discounts on the premium.

  • Property Insurance Policy
  • Product Code: 4413
  • Product UIN: IRDAN115RP0006V01202021

Help us know you better!

This contains only an indication of the cover offered. For complete details on risk factors, terms, conditions, coverages and exclusions, please read the sales brochure carefully before concluding a sale.ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400025. . IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408). (Property Insurance, 4413 , IRDAN115RP0006V01202021)