Health insurance premiums to rise? Delhi residents may face 15% hike amid pollution surge

The insurance companies in India are weighing a proposal to increase health insurance premiums for New Delhi residents by 10 to 15%, following a surge in claims linked to severe air pollution in 2024.

Naval Goel, CEO of PolicyX.com is of the opinion that Indian insurance companies are demanding this rise.

"Indian insurers are demanding an increase of 10% to 15% on premiums for the residents of New Delhi. This is due to a surge in respiratory illnesses and other health problems caused or aggravated by poor air quality and claims related to the same. For the first time, insurers are considering directly linking health insurance premiums to air pollution levels. This means people living in more polluted areas could face higher premiums. Not only Delhi, the premiums might increase in these cities too like, Mumbai, Raigad, Nashik, Guntur, Visakhapatnam, Ghaziabad, Noida, Thiruvananthapuram, Jaipur, Mangaluru, and Hyderabad," he said.

However, any such move would require approval from the Insurance Regulatory and Development Authority of India (IRDAI). Insurers would need to provide strong evidence linking pollution to increased claims, experts like Goel note.

As reported by Reuters, this proposed hike in rate, which requires approval from the insurance regulator, stems from last year's unprecedented pollution levels in the capital. If implemented, it would mark the first instance of air pollution being directly factored into health insurance pricing in India—a move that could set a precedent for premium adjustments in other cities facing similar environmental challenges.

Even if we look today, that is, February 21, 2025, New Delhi's Air Quality Index (AQI) stands at 172, which is categorised as 'Unhealthy'. This level indicates that everyone may begin to experience adverse health effects, with sensitive groups potentially facing more serious issues. Residents should limit their prolonged outdoor activities and consider using air purifiers indoors to mitigate health risks.

In November, India's pollution control authority reported that the national capital's 24-hour AQI hit a season-high of 491 out of 500. An AQI above 400 falls into the "severe" category, posing risks to healthy individuals and causing serious harm to those with pre-existing health conditions.

However, in India, health insurance premiums can vary by city, influenced by factors such as hospitalisation costs and demographic trends.