East Bengaluru buyer answers
Do I need home insurance for a new flat, and what does it cover?
Direct answer: Home insurance for a flat is your choice, not a RERA requirement on buyers, but it fills gaps the builder's duties don't. IRDAI's standard home policy, Bharat Griha Raksha, covers your flat and its fittings, and optionally your contents, against fire, flood, earthquake, storm, riots and similar events. It does not pay for poor construction.
Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.
Verify with your lawyer and your insurer: This page explains public rules and the standard IRDAI policy wording. It isn't legal advice or a recommendation of any insurer. Read the policy schedule and wording you are actually offered, and have your own lawyer check anything that touches your agreement for sale.
A new flat comes with a lot of paper: the agreement, the possession letter, the OC, the association forms. Home insurance is usually not in the pile, because nobody is required to hand it to you. That is exactly why it gets missed. Below is what the standard policy covers, where it stops, and how it sits next to the protections RERA already gives you.
Isn't the builder already insured?
Partly, and for a different purpose. Section 16(1) of the RERA Act says the promoter "shall obtain all such insurances as may be notified by the appropriate Government, including but not limited to insurance in respect of" title of the land and building, and construction of the project (RERA Act, s.16). The promoter pays the premium, and the cover "shall stand transferred to the benefit of the allottee or the association of allottees" when the agreement for sale is signed.
Two limits matter. First, that cover depends on what the government has notified; our page on whether RERA requires title insurance goes into how far that has gone. Second, it protects the project, not your sofa, your modular kitchen or your rent if the flat becomes unlivable. A personal home policy is about your own loss.
Does the builder's five-year defect liability make insurance pointless?
No, because they cover different problems. Under section 14(3), if a structural defect or a defect in workmanship, quality or services is brought to the promoter's notice within five years of handing over possession, the promoter must fix it "without further charge, within thirty days" (RERA Act, s.14(3)). Our guide to defects after possession covers how to use that right.
Home insurance works the other way round. The standard policy excludes subsidence damage caused by "defective design or workmanship or use of defective materials" and by "normal cracking, settlement or bedding down of new structures" (IRDAI, Bharat Griha Raksha wording). So a seepage crack from poor waterproofing is a builder claim. A kitchen fire or a burst overhead tank is an insurance claim.
What does the standard home policy cover?
Bharat Griha Raksha is IRDAI's standard product for homes. IRDAI publishes one standard proposal form, prospectus, policy wording and key features document, and each insurer sells it under its own name. The cover has two parts.
Home Building cover. The wording says you can buy it for "Your building, flat, apartment, duplex apartment, bungalow or any dwelling place. Fittings and fixtures are included." Listed extras include parking space, water tanks for residence, compound walls, gates and internal roads.
Home Contents cover. This is for "articles or things of personal, non-commercial use" inside your home: furniture, TVs, electronics, air conditioners, kitchen equipment and other household items. If you take both covers, general contents are covered in-built at 20% of the building sum insured, up to a maximum of ₹10 lakh, and you can declare a higher figure for extra premium. Jewellery, silverware, paintings and similar valuables need a separate optional cover on an agreed-value basis.
The insured events in the standard wording are:
- Fire
- Explosion or implosion
- Lightning
- Earthquake, volcanic eruption or other convulsions of nature
- Storm, cyclone, typhoon, tempest, hurricane, tornado, tsunami, flood and inundation
- Subsidence, landslide and rockslide (with the exclusions above)
- Bush, forest or jungle fire
- Impact damage, for example from a vehicle, a falling tree or a wall
- Missile testing operations
- Riot, strikes and malicious damage
- Acts of terrorism, as per the terrorism clause
- Bursting or overflowing of water tanks, apparatus and pipes
- Leakage from automatic sprinkler installations
- Theft within 7 days of, and caused by, any of the events above
On top of repair or rebuilding, the policy pays up to 5% of the claim for architect, surveyor or engineer fees, up to 2% for debris removal, and loss of rent or rent for alternative accommodation while the home is not fit to live in after an insured event.
What does it leave out?
Read the exclusions before you buy, because some surprise people:
- Ordinary burglary. Theft is in the list only when it follows an insured event within 7 days. A plain break-in is not one of the 14 events. The wording does allow for add-ons you buy separately, so ask the insurer what it offers.
- Electrical breakdown of the appliance itself. Damage to an electrical or electronic machine from short circuiting, over-running or similar causes is excluded "only to the particular machine so lost, damaged or destroyed".
- Missing items. Anything mislaid, or whose disappearance cannot be linked to a single identifiable event.
- Loss in value. "Any reduction in market value" after repair is not paid, and nor are loss of earnings or other indirect losses.
- Big alterations. An addition that increases carpet area by more than 10% is excluded unless you pay extra premium and get it endorsed.
- Cash, documents and vehicles. Bullion, unset stones, manuscripts, securities, cash and vehicles are excluded unless the policy expressly says otherwise.
How is the sum insured worked out for a flat?
Not on the price you paid. The building sum insured equals the cost of construction of your home, including fittings and fixtures, at the start of the policy. The formula in the wording is carpet area in square metres multiplied by the rate of cost of construction you declare and the insurer accepts, plus any additional structures.
Two rules in the wording help buyers. If the insurer accepted your declared rate, it pays on that rate even if its surveyor later finds rebuilding cheaper. And the policy says underinsurance "does not apply", so a sum insured that turns out lower than the real value at risk does not cut the claim on a partial loss. The catch runs one way: if your actual carpet area is less than what you declared, the claim is worked out on the actual area. Take the carpet area from your agreement for sale, not a brochure; our page on carpet area vs super built-up area explains why the numbers differ.
The value of your flat's land share, your undivided share, is not part of that construction-cost formula. That is one reason a home policy is not a substitute for a lawyer's title check.
When should I take the policy?
The wording lets you buy Home Building cover if you own the structure, if you are "occupying Your home as purchaser under an agreement of sale", or if you are an authorised occupier. So you don't have to wait for the sale deed. A sensible point is possession, before the interiors team and your furniture move in, because that is when your own money starts sitting inside the flat. Do your possession inspection first and record defects with the builder, since the policy will not pay for them later.
Policies can run for one year or longer, but the wording caps the term at 10 years.
For what the possession letter and the OC each mean, see possession letter vs OC.
What if I have a home loan?
If your flat or contents are mortgaged to a bank, the schedule shows an "Agreed Bank Clause" naming the bank. Under that clause the insurer pays the bank "the entire amount that We are liable to pay under this Policy". So a claim payment goes to your lender, not straight to you. If a lender offers a bundled policy, check whether your sanction letter or loan agreement actually requires one, and compare the wording before you accept it. Our guide to under-construction home loans covers what else to read in those papers.
What about the building's common areas?
Your personal policy covers your flat and its fittings. Lifts, the clubhouse, the DG set and the structure's shared parts are a matter for the promoter's cover and, after handover, the association. When you join the association, ask what policies it holds and who renews them; our pages on association handover and the corpus fund explain who controls that money.
A short checklist before you buy
- Decide whether you need building cover, contents cover or both.
- Take carpet area from your registered agreement, not marketing material.
- List valuables separately if you want them covered, and keep bills or valuation certificates.
- Read the 14 insured events and the exclusions in the wording you are offered.
- Tell the insurer about any home loan so the bank clause is set up correctly.
- Keep the policy with your possession documents and diarise the renewal.
Frequently asked questions
Is home insurance compulsory for a flat in Bengaluru?
The RERA Act puts insurance duties on the promoter under section 16, not on buyers. A lender may set its own condition, so check your sanction letter and loan agreement.
Does home insurance cover cracks or leaks in a new flat?
Not when they come from defective design, workmanship or materials, or the normal settling of a new building. Those go to the builder under the five-year defect liability in section 14(3) of the RERA Act.
Can I insure a flat before the sale deed is registered?
Yes. The standard wording allows Home Building cover if you are occupying your home as purchaser under an agreement of sale.
Does the standard policy cover burglary?
Only theft within 7 days of, and caused by, an insured event such as a fire or riot. Ask the insurer whether it sells a separate add-on for burglary.
Can a tenant insure their belongings?
Yes. The wording lets a tenant, lessee or licensee buy Home Contents cover, while the owner buys Home Building cover.
References
- Real Estate (Regulation and Development) Act, 2016, ss. 14(3), 16. https://rera.karnataka.gov.in/resources/staticpage/Real_Estate_Act.pdf, accessed 17 Oct 2026.
- IRDAI, Annexure I: Bharat Griha Raksha (standard proposal form, prospectus, policy wordings, key features document and Agreed Bank Clause). https://irdai.gov.in/documents/37343/0/Annexure-I-Bharat+Griha+Raksha.pdf/f6742d71-8194-333f-1409-2c8c652a0964?t=1633438223524, accessed 17 Oct 2026.
- IRDAI, Standard Products: General Insurance. https://irdai.gov.in/en/web/guest/standard-products-general-insurance, accessed 17 Oct 2026.