Landslide is a natural disaster cause economic, social and environmental losses. The estimation of these losses is essential to provide the massive destructive power or of the disaster to the society. This study mainly aims at the estimation of economic losses of landslide disaster experienced by the people living in the rural areas of the Idukki district. Totally, 312 sample households were collected from the three villages of Idukki district which were hit massively by the landslide. The stratified proportionate random sampling technique were used for the selection of sample households from the three villages namely, Konnathady, Kanjikkuzhi and Rajakkad. For the estimation of the economic losses, Averting Behaviour Model (ABM) is used. The results showed that rupees 196816127.32 has accounted as the total loss met by the sample households and the average loss was 630820.92 rupees. Both the direct and the indirect losses were estimated on the basis of repair cost, costs of lost, revenue loss and the health cost finally, the total economic loss were carried out. The result of the study will be expected to use as a basis for a policy formation to reduce the impact of landslide in hilly rural villages.