New data shows pollution now causes 8% of health insurance claims in India, with children accounting for 43%. Insurers are considering a 10-15% premium hike for metro cities.
Brajesh Mishra
As India’s major cities are enveloped in the first severe post-Diwali smog of 2025, new data reveals the staggering health and financial toll of air pollution. Pollution-related hospitalizations now account for 8% of all health insurance claims, with 43% of these claims filed for children under 10. In response to soaring treatment costs—up 11% for respiratory illnesses—and a surge in hospitalizations, Indian health insurers are now actively considering a 10-15% premium hike specifically for residents of high-pollution metro cities.
This move marks a crisis point, turning a long-standing environmental issue into a formal line item in family budgets. The insurance industry's proposal, currently under review by the [IRDAI], was triggered by a 17-18% spike in respiratory claims in Delhi during the 2024 pollution season. The current data from [Policybazaar] confirms this trend, showing an average pollution-related claim size of ₹55,263 and daily hospitalization costs averaging ₹19,076. This formalizes what has been an economic drag for years; in 2019, pollution-related losses and healthcare expenditures cost India an estimated 1.36% of its GDP.
While most reports are focusing on the novelty of a 10-15% "pollution premium" hike, the deeper story is the profound intergenerational crisis this data reveals. The fact that 43% of all pollution claims are for children under 10 shows this is not just an insurance adjustment; it's the financial sector formally pricing in the long-term, systemic health damage being inflicted on the next generation. The story is no longer just about environmental policy failure; it's about the creation of a massive, long-term financial burden on families for the basic act of breathing.
If approved, this will be the first time environmental risk is directly and officially monetized in India's health insurance premiums. This could create "health insurance deserts" in metro cities, where premiums become unaffordable for the very people most exposed, such as outdoor workers and low-income families. It signals a systemic failure of preventive public health policies, like the Graded Response Action Plan (GRAP), with the financial cost now being passed directly to the public through insurance and out-of-pocket expenses.
When breathing the air in your city is priced like a pre-existing condition, who will be able to afford the cost of living?
Why are health insurance premiums rising in metro cities in 2025? Insurers are considering a 10-15% premium hike for metro cities because pollution-related hospitalizations have surged. Data shows pollution now accounts for 8% of all claims, significantly increasing payouts for respiratory and cardiac treatments.
Are children more affected by pollution health costs? Yes. Data from Policybazaar indicates that 43% of all pollution-linked health insurance claims are filed for children under the age of 10, making them the most financially and physically impacted demographic.
Which cities have the highest pollution-linked insurance claims? Delhi leads with 38% of all pollution-linked claims in India, followed by Hyderabad (8.34%), Bengaluru (8.23%), Pune (7.82%), and Mumbai (5.94%).
How much does pollution hospitalization cost in India? The average claim size for pollution-related ailments is approximately ₹55,263, with daily hospitalization costs averaging ₹19,076. Treatment costs for respiratory illnesses have risen by 11% in the last year.
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