Why is the insurance figure lower than my property's price?

Because insurance covers the building only. In Delhi the land is usually most of the price, and land cannot burn down.

Our Karol Bagh building is very old.

Then its rebuilding cost has to be assessed on what it would actually take to reconstruct that structure today, which is not the same as its market value or its book value.

How often should we redo this in Delhi?

Every three to five years, because construction costs here move noticeably. Also after any extension.

Insurance Valuation in Delhi

Delhi construction costs have risen sharply. A building insured on a figure from ten years ago is almost certainly underinsured today.

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What is different about doing this in Delhi

Delhi construction rates have moved considerably and a rebuilding cost fixed years ago is unlikely to be adequate now.

Older Delhi buildings, particularly in central areas, were built to different specifications and their rebuilding cost has to be assessed rather than assumed.

For buildings with commercial use below and residential above, common across Delhi, the rebuilding assessment covers both.

How we handle it here

You call usTell us where the property is and what the report is for. Five minutes, free, no obligation.
We inspectUsually the same day or the next anywhere in Delhi. Our engineer measures, checks the construction and photographs everything, with the date, time and location recorded on every photo.
We gather the evidenceThe notified rate for your colony, its category, and records of what similar properties nearby actually sold for.
You get the reportIn 48 to 72 hours, in the format your bank, CA, court or embassy needs.

Questions we get asked about this

Why is the insurance figure lower than my property's price?: Because insurance covers the building only. In Delhi the land is usually most of the price, and land cannot burn down.
Our Karol Bagh building is very old.: Then its rebuilding cost has to be assessed on what it would actually take to reconstruct that structure today, which is not the same as its market value or its book value.
How often should we redo this in Delhi?: Every three to five years, because construction costs here move noticeably. Also after any extension.

Checked by Parish Rao, Chartered Engineer and Government Approved Valuer (Registration number CAT-I/443/117/2000-01).

Page last checked on 7 October 2026.

Read the full guide to Insurance Valuation

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Rebuilding cost, not market value

An insurance valuation answers a different question from every other report on this site: what would it cost to rebuild this structure. The land is excluded entirely, because land does not burn.

That is why the figure looks low next to a market value, particularly in Delhi where land carries most of the value in the better colonies. Both figures are correct for their own purpose.

Under insurance, and how it bites

Where the sum insured is below the true reinstatement cost, a claim can be reduced in proportion even when the loss is partial. Owners discover this at the claim, which is the worst possible moment.

We assess current construction cost for the specification actually built, in the Delhi market, and state the basis so the insurer and the insured are working from the same definition.