India’s real estate market is booming, with property values skyrocketing in metro cities and even Tier-2 towns. Yet, according to IRDAI data, less than 1% of Indian homes are insured in 2025. This gap is striking, given frequent floods, earthquakes, and theft cases.
So why do Indians skip home insurance despite increasing risks? The answer lies not in affordability alone, but in behavioural and cultural factors that shape financial decisions.
1. The “It Won’t Happen to Me” Mindset
- Many Indians underestimate the risk of fire, theft, or floods.
- There is a cultural bias toward optimism and denial of risk.
- Example: In Chennai, after the 2023 floods, only 5% of affected homeowners had insurance coverage.
2. Priority on Gold & Life Insurance, Not Property
- Families prefer investing in gold, mutual funds, or life insurance.
- Home insurance is seen as an expense, not an investment.
- Many assume property is “permanent” and won’t lose value.
3. Lack of Awareness & Misconceptions
- Many don’t know that policies cover natural disasters, burglary, and fire.
- A common myth: “Home insurance is only for rich people with bungalows.”
- In reality, affordable plans start at less than ₹500 per year for small flats.
4. Complexity & Paperwork Fears
- Indians often associate insurance with complicated claim processes.
- Lack of digital outreach and past experiences of delays reduce trust.
- Although insurers now offer digital onboarding and instant claim apps, awareness remains low.
5. Landlord-Tenant Confusion
- Many tenants believe home insurance is the owner’s responsibility.
- Owners renting out property assume tenants will take care of damages.
- Result: No one buys coverage.
Real-Life Example: Delhi Theft Case
In 2024, a family in Delhi lost ₹10 lakh worth of jewelry and electronics to burglary. They had life insurance and mutual funds but no home insurance. A simple ₹2,000 annual home insurance plan could have saved them from financial ruin.
Quick Infobox: Why Indians Skip Home Insurance
| Behavioural Factor | Impact |
|---|---|
| Optimism bias | Underestimating risks |
| Preference for gold/life cover | Ignoring property insurance |
| Misconceptions | “It’s for the rich only” |
| Claim complexity fear | Lack of trust in insurers |
| Landlord-tenant confusion | Nobody takes responsibility |
Why This Matters
With rising property values, climate change, and urban theft, home insurance is no longer optional—it’s essential. Unless behavioural barriers are addressed with awareness and financial education, millions of Indians will remain vulnerable to sudden losses.
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