Fire Insurance in India: FIRE, STFI, EARTHQUAKE & TERRORISM Rates
A practical historical guide with reference tables for Blogger readers – from the All India Fire Tariff (AIFT) era to the present file-and-use regime.
How rating has evolved (at a glance)
Sources: TAC/AIFT handbook (2001); IRDAI detariffing overview (2020); PSB market rate note consolidating EQ & STFI circulars (2012/2016); GIC Re/IMTRIP notices.
Earthquake (Fire & Shock) – Zone-wise Add-On (reference)
India follows 4 seismic zones (Zone 2–5; many industry docs label as I–IV for rating tables). Typical property add-on rates used in the market since the 2012 circular are below.
| Occupancy | Zone I (Highest) | Zone II | Zone III | Zone IV (Lowest) | Units |
|---|---|---|---|---|---|
| Industrial risks (incl. standalone storage/utilities) | 0.50 | 0.25 | 0.10 | 0.05 | per mille p.a. |
| Non-industrial (dwellings, hotels, shops per Section III) | 0.05 | 0.05 | 0.05 | 0.05 | per mille p.a. |
Reference: Market circular dated 22-02-2012 as reproduced in insurer note for treaty cession w.e.f. 01-01-2020. Seismic zoning background: BIS/NDMA map; ~11% of India is highest risk (Zone 5), ~18% Zone 4, ~30% Zone 3, balance Zone 2.
STFI – Storm, Tempest, Flood & Inundation (reference)
Minimum NATCAT (STFI) rates widely adopted since the 12-02-2016 circular:
| Occupancy | STFI Rate | Units |
|---|---|---|
| Dwellings | 0.075 | per mille p.a. |
| Non-industrial (Section III) | 0.1125 | per mille p.a. |
| Industrial incl. utilities/tank farms | 0.1875 | per mille p.a. |
| Standalone storage – in godown | 0.1875 | per mille p.a. |
| Standalone storage – in open | 1.125 | per mille p.a. |
These represent minimum natural catastrophe loadings commonly used with IIB loss-cost base rates for treaty cessions; insurers may file/use different pricing subject to underwriting.
FIRE (Flexa) – from Tariff to Loss-Cost
Tariff era (AIFT 2001): The All India Fire Tariff prescribed base “Flexa” rates by occupancy/construction, plus add-on loadings. Kutcha construction attracted specific additional per-mille. Where a risk wasn’t listed, a provisional 2.50‰ could be charged pending TAC rating.
Post-detariff (2007 onward): Insurers price on a file-and-use basis using IIB loss-costs, exposure, risk engineering, deductibles, and NATCAT add-ons (EQ/STFI) as applicable. Many market notes provide ready reference loss-costs (e.g., “IIB Flexa loss-cost rate” tables) used for treaty cession computation.
Example (treaty cession note, w.e.f. 01-01-2020)
Premium often computed as: IIB loss-cost rate + NATCAT (STFI & EQ). Some notes also mandate minimum add-ons for MBD/FLOP in All-Risk/IAR/Mega programs. (See reference note below.)
Reference: AIFT handbook (2001) incl. general rules; IRDAI detariffing background (2020 WTW paper); market compilation for IIB + NATCAT usage (2020 treaty cession note).
Terrorism Cover – via IMTRIP (since 2002)
Mechanism: Terrorism for property is written in India through the Indian Market Terrorism Risk Insurance Pool (IMTRIP), managed by GIC Re. Insurers issue the cover and cede to the pool; the pool publishes rate schedules (per-mille of total sum insured) by occupancy and TSI bands, revised periodically (subject to regulator approval). Limits, deductibles and terms are set by the pool wordings/circulars.
- Start of pool: April 2002.
- Revisions: Pool premium rates are updated from time to time (e.g., 2024–25/2025–26 renewal cycle). Circulars are circulated to all non-life insurers.
- How to read rates today: Identify occupancy class and total sum insured band → apply current per-mille in force → deductibles as per pool rules.
Because pool rate tables change and are distributed officially to market members, always confirm the current IMTRIP circular applicable on your policy effective date.
Seismic Zoning Quick Reference
India’s seismic map divides the country into four zones. Approximate exposure split: Zone 5 (~11%), Zone 4 (~18%), Zone 3 (~30%), Zone 2 (balance). Always map your risk location to the BIS/NDMA zone to decide EQ add-on.
Important Notes & Disclaimers
- Post-2007, property pricing in India is not tariff-fixed (except pool/compulsory areas). The EQ/STFI numbers above are widely referenced minimums from market circulars used for treaty cessions; insurers may deviate per filed products and underwriting.
- Terrorism pricing is governed by IMTRIP circulars; use the latest schedule applicable on your policy start date.
- This post is informational; it’s not a quote or advice. Always obtain the insurer’s written rate and terms.
Citations (publicly accessible references)
- AIFT / TAC handbook extracts & classifications (incl. EQ & general rules). See compiled public copies (training/handbook): All India Fire Tariff (public copy).
- EQ & STFI market reference (as reproduced in insurer note for treaty cessions, consolidating 22-02-2012 EQ circular & 12-02-2016 STFI circular): PSB – Fire Insurance note (2020).
- Detariffing overview & context: WTW – Changing landscape for property rates (2020).
- Seismic zoning context and zone shares: PIB Press Release on seismic zones (2021); background explainer: Earthquake zones of India.
- IMTRIP pool governance / notices: GIC Re – IMTRIP reinsurance program notice (2025); pool retrospective note: IMTRIP – decade of service.
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