Fire Insurance
Fire insurance is a property cover that compensates the policyholder for damage caused by fire, lightning, explosion, and 12 named allied perils. In India it is issued under the IRDAI Standard Fire and Special Perils (SFSP) wording or the retail Bharat Griha Raksha policy.
What is Fire Insurance?
Fire insurance in India is the cornerstone non-life cover for buildings, contents, plant and machinery against damage caused by fire, lightning, explosion, riot, strike, malicious damage, storm, flood, inundation, earthquake (with add-on), and impact damage. The policy wording is standardised under the IRDAI Standard Fire and Special Perils (SFSP) framework, which lists 12 named perils and mandates the same exclusions across insurers.
For homeowners with a sum insured up to ₹10 lakh on contents, IRDAI’s Bharat Griha Raksha policy supersedes the SFSP wording from April 2021 and is the simpler retail product. Above that threshold, customers move to SFSP wording with optional add-ons.
Why it matters for property buyers
India recorded over 1.65 lakh fire incidents in 2023 (NCRB), with ₹11,000+ crore of insured loss and far higher uninsured loss. Apartment fires often start in kitchens, electrical risers, or basement parking from EV-related lithium-ion failures, and damage can run from ₹50,000 to total reconstruction. For a 1,200 sq ft Bengaluru flat, replacement cost is ₹24–30 lakh — without fire cover, that is an out-of-pocket loss.
Lenders such as SBI, HDFC, and LIC Housing Finance require an SFSP or Griha Raksha policy assigned in their favour for the loan tenure as a non-negotiable disbursal condition.
How to verify or calculate it
Sum insured for structure must equal reinstatement value: built-up area × current reconstruction cost (₹1,800–₹3,000 per sq ft depending on finish). Steps to verify:
- Confirm the policy schedule lists “Standard Fire and Special Perils” or “Bharat Griha Raksha” — generic “fire policy” wording is no longer compliant.
- Check that earthquake cover is included — automatic in Griha Raksha, an add-on in SFSP, mandatory in seismic Zones IV–V.
- Verify the address, occupancy code (residential vs commercial), and assignee bank match the title deed and loan sanction letter.
- Renew before expiry — even one day of lapse voids the lender’s hypothecation cover.
How Brickplot uses Fire Insurance in its score
Fire safety infrastructure — wet risers, sprinklers, smoke detectors, escape staircases, fire NOC validity — directly affects insurability and feeds into the Project Quality & Specs axis (12% weight). Projects without a current fire NOC, projects exceeding sanctioned floors above the fire-tender reach (typically 60m), or projects with documented sprinkler/riser failures during inspection trigger downward score adjustments. We also flag projects where insurers have refused or loaded fire premiums above market — a leading indicator of structural risk.
Related terms: Home Insurance, Title Insurance, Sinking Fund
Related terms
Brickplot verifies fire insurance disclosures on every reviewed project as part of the independent 11-axis score. No builder commissions. No editorial override.