41% Indians fear disasters, yet 62% undecided on home insurance: Report

Natural disasters and home loans push many to consider home insurance, but confusion and lack of urgency hold back a majority from buying protection.

Despite an increase in natural disasters and urban security risks, home insurance has yet to gain real traction among Indian households. A recent survey of Policybazaar highlights the deep gap in adoption, while 39 per cent of those exploring home insurance went ahead with a purchase, a far larger segment remains hesitant due to confusion, low perceived need, and a lack of urgency.

 

Natural calamities top the list of triggers

 

The study shows that natural disasters are the single biggest factor pushing Indians to consider home insurance. Around 41 per cent of respondents cited calamities such as floods, earthquakes, cyclones, and storms as reasons to secure their homes. This isn’t surprising given the increasing frequency of such events across India, from the devastating floods in Himachal Pradesh to cyclones lashing Odisha and West Bengal.

 

For many, ongoing home loans are another strong motivator. About 31 per cent said they view home insurance

 

as a financial safety net that ensures their loan repayments continue without major disruption in case of a mishap. Theft concerns, especially in densely populated urban and semi-urban areas, were raised by 30 per cent of respondents.

 

Other risks like fire accidents, gas cylinder explosions, water leakages, lightning strikes, voltage fluctuations, and even incidents like riots or terrorism have also emerged as triggers, albeit for a smaller segment of buyers.

 

A market riddled with hesitation

While 39 per cent of those exploring options made purchases, mostly homeowners in standalone houses or societies, the rest are either still exploring or have decided not to buy.

 

Here’s what’s holding them back:

Confusion over policy selection (27 per cent): Many struggle to understand the fine print, coverage limits, and exclusions across different policies, leading to decision paralysis.

 

Perceived lack of necessity (23 per cent): This group believes home insurance is unnecessary as they haven’t experienced major losses before.

 

Lack of urgency (18 per cent): Even interested buyers often drop off midway, unable to prioritise the purchase amidst other financial commitments.

 

Need for education and simplified offerings

Experts point out that insurers need to step up efforts to educate consumers and simplify their offerings. The current range of policies often overwhelms first-time buyers with technical jargon and too many options.

 

“Insurers must focus on demystifying home insurance and offering tailored products with clear communication. This could go a long way in bridging the adoption gap,” says Sagar, a Delhi-based real estate broker and industry observer.

 

For homeowners, especially those with active home loans or living in disaster-prone regions, home insurance can serve as an affordable layer of protection against unexpected events.