Just gotten your new home? Congratulations, you’ve fulfilled a great Singaporean dream. The next thing on your mind is probably renovations, shopping for statement furniture, and everything that new homeowners get excited about, except for… insurance.
If you own a HDB, and think that the fire insurance will insure you against tremendous heartache is an accident does happen, think again.
No, your TV isn’t included in the basic fire insurance coverage
The mandatory HDB Fire Insurance that you take on covers damages the internal building structure, fixtures and fittings provided by HDB and its approved developer. In other words, your home contents like the state-of-the-art home theatre system or the designer trashcan are not included, and neither are your own fixtures.
If you’ve spent a ton of money and effort on building your nest, then it makes sense to ensure that it gets adequate insurance so you don’t run into a nasty financial setback should any accident occur.
What kinds of risks?
The extent of coverage varies with the type of plan you purchase, either insured perils or all risks. Some of the typical events that are covered by insurance plans are:
- Fire and explosion
- Impact by vehicles (could also include aircrafts)
- Bursting or overflowing of water tanks or pipes
- Theft by violent or forcible entry
- Specific natural disasters, like floods, earthquakes, windstorms, volcanic eruptions.
- Riots, strikes, and malicious acts
In addition to the above, insurance providers may also account for unique circumstance. For example, MSIG’s Home Plus insurance even compensates for monetary loss suffered due to fraud or dishonesty of domestic helpers.
Extent of coverage
While the mandatory fire insurance covers only the structure as well as fittings and fixtures by the HDB, property insurance also covers for what’s within the home.
How much premium you would pay depends on the extent of coverage. Most insurers would offer a basic plan, as well a comprehensive or enhanced plan. Across the board, these are what would be covered even in basic plans.
- Damages to home renovations, which refer to any improvements and additions to fittings and fixtures made within the premises, such as floorings, bathroom fixtures, air conditioners, and built-in wardrobes.
- Home contents and personal belongings. This includes items such as valuables, domestic appliances, furniture, clothing, and equipment. Do note that there is a limit per article, usually up to 5% of the sum insured on contents, or with a dollar limit (e.g. $1500 per article). Check with your insurer about additional limits for very expensive items such as pianos, organs, and other special equipment.
- Personal liability for you and your family.
Pricier and more comprehensive plans offer additional coverage such as:
- Removal of debris - Depending on the extent and type of accident, you may need to seek professional help with removal of debris. Insurance providers usually offer coverage of up to 5% of the total sum insured of home contents and renovations cover.
- Alternative accommodation or Loss of Rent - This covers the cost of a reasonable alternative accommodation, or rent that continues to be payable by you. This would come in incredibly useful in the event that the accident renders your home inhabitable.
The coverage limits are either set with a fixed amount and time period (e.g. up to S$1000 per week for 12 weeks, up to S$350 a day, or 10% of total benefit limit of building/renovations and contents cover).
- Fraudulent use credit and ATM cards - In the event that there was a robbery/ burglary, the insurance company will compensate with a limit that’s sadly, quite low. A limit of up to $1000 is one of the highest in the market.
- Loss of domestic pet – Although no amount of money can actually compensate for the loss of a dear pet, it’s still nice to know that you get a small sum as condolence.
- Personal accident and medical expenses - Many insurance companies include this in the comprehensive plan, though you would most likely already have this covered with greater limit with a personal accident or life insurance.
Updating your policy
You don’t have to run to your agent every time you purchase something for the home. However, bear in mind that there are category limits for different household contents and renovations.
What this means is that should you later on choose to renovate your home, purchase high-value furniture or any equipment that would be placed at home, then do consider speaking to your agent about changing the sum insured.
On a final note, don’t assume that premiums are going to expensive. Premiums for Standard plans for small HDB flats go for as low as less than S$40 a year to a few hundred dollars for larger private homes with comprehensive plans.
Take time to think through the coverage you require, and consult a professional mortgage consultant to help you evaluate and choose the best plan for your needs.
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