What are the property insurance available to cover my home?
There are 3 types of property insurance namely, Fire Insurance, Houseowner Insurance and Householder (content) Insurance.
Fire insurance provides protection against material damage to properties such as building and household contents, fixtures and fittings caused by the following perils :
- Fire (including damage by smoke from a fire or by water used in putting it out), lightning, thunderbolt and subterranean fire (underground / peat fire)
- Aircraft and other aerial devices and / or articles dropped there form
- Bursting and overflowing of water tanks, apparatus or pipes
Houseowner insurance is a comprehensive insurance policy that covers the building against loss or damage caused by all the perils covered by the fire policy including theft by forcible entry, loss of rent if damaged rendered unihabitable and personal liability to the public in respect of bodily injury and property damage.
Householder Insurance on the other hand, protects the household contents.
What kind of property is covered by a Houseowner insurance?
Property here means private dwellings that includes houses, flats and apartments. This also applies to buildings used as home offices where the occupant work from home.
When should I purchase a houseowner insurance?
Insurance coverage on your home should start as soon as you become the legal owner. If you are financing your home by taking up a loan, the financier will usually require you to insure the building for the amount that it would cost to replace it.
What kind of items should I insure for my home contents?
All contents in your home should be covered and anything that is expensive, for instance, electrical appliance, works of art, jewellery, computer equipment should be separately listed to ease claims handling in the future.
What factors should I consider when buying insurance for my home?
Firstly and foremost, purchase only the type of insurance you require. Then, ensure that it is the proper amount to cover as you do not want to over- or under-insure your property. Determine the amount of personal property (contents) you need to insure. Once these factors are considered, make comparison on the property insurance offered in the market and choose the insurer you want to purchase your policy from. You should also decide if you require an agent's assistance or buy directly from the insurer.
How much should I insure my home?
The amount of insurance you buy should be based on the cost of rebuilding, and not on the price of your home. The cost of rebuilding your house may be higher (or lower) than the price you paid for it or the price you could sell it for today. This should include the renovation or extension made to your home.
What if I underinsure my home and/or contents?
The insurance company would proportionate the amount you are paid if you make a claim based on the sum insured of the insurance policy, if you do not insure the full replacement value of your home and/or contents.
How often should I review my home insurance policy?
To avoid being under insure, a yearly review of your property and possession should be done before renewing your policy to ensure adequate coverage. On the other hand, take into consideration any depreciation costs as you do not want to pay more than necessary.
If I am renting, does my landlord's insurance protect me?
Generally, no. The property owner's insurance covers the building itself and seldom a tenant's possessions because the tenant has no insurable interest on the property. However, the tenant may take up a householder policy to protect his/her personal property.
How do I read a Houseowner / Householder insurance policy?
When you read an insurance policy, you'll want to know:
- Who is covered?
- What property is covered?
- What "perils" are covered? A peril is an event that can cause damage. The events are such as fire, theft or wind. Even riot is a peril!
- What is excluded? Exclusions may apply to the persons who are covered, the property covered, the perils insured against, or the location where coverage applies. Not every circumstance can be covered by an insurance policy. Normal wear-and-tear and deterioration of property is not insurable; you should
check your policy for other exclusions.
- What extensions of coverage are available? Some policy extensions are automatic, while others are optional and/or conditional.
- What are the conditions of coverage and what do you have to do to make sure that coverage continues?
- What do you do if there's a loss? How do you make a claim to recover a loss?
How do I make a claim?
If you have suffered a loss for which you are insured, inform your insurer of the nature of your claim. If there has been a fire, burglary or theft, you need to report to the police. You'll be required to supply information about the circumstances of the claim as well as reasonable evidence to justify the amount claimed. Your insurer will want an accurate description of items stolen, for example, and will want to know when they were acquired and what they cost at that time.