Do you need fire insurance, home insurance, or both? One protects your house; the other protects its contents. Make sure you're covered before it's too late.
Nowadays, insurance is not limited to maritime contracts and fire coverage. If something is of value, chances are you can insure it.
There are many different types of insurance policies to choose from in Singapore. Singaporeans spend a monthly average of SGD370 on insurance plans2, with the majority spent on health. Home and fire insurance are the most common property insurance policies sold.
What type of insurance do you need: home or fire?
It doesn't matter if you're a homeowner, landlord or tenant. Insurance is a necessity that you hope you'll never need, and the best time to shop for it is before you move in or close on the purchase.
Fire insurance is compulsory for HDB owners with a HDB mortgage or loan. It provides coverage for structural damage sustained during a fire or other incidents listed in the policy. Unless stated, fire insurance will not cover you for personal injury.
Home content insurance, which is usually purchased to supplement fire insurance, covers the contents of your home, personal belongings, fixtures and renovations. The cost of the policy depends on the item being insured and the risk involved. The more valuable the insured item, the higher the premiums and deductibles will be.
There's been a fire. Who will be covered?
1. Mortgage insurance only
2. Fire insurance only
When Mrs Nair bought her house, she purchased both fire and home contents insurance to protect her house and her personal belongings. Compared to the cost of her new house, Mrs Nair figured the insurance for complete peace of mind wasn't really that expensive. Smart move!
The fire insurance covered the cost of repairing the structure of the building. The home insurance covered everything else in the house, including furniture, appliances, computers and clothes. Even her helper's personal property and the spoiled food in the refrigerator were covered.
Verdict: 100% covered
Fire insurance: inclusions and exclusions
Every fire insurance policy is different, but you can expect to see most plans cover your home's exterior and fittings, typically excluding your home's interiors, such as:
- renovation work
- household contents
- personal injury claims
- third-person liability
- money, watches and art
- alternate accommodation
What home insurance will you need, and how much?
When buying insurance, there are a few things to consider, such as the value of your home and its contents, and the deductible you're willing to pay to keep your premiums down.
You won't need massive coverage for expensive artwork if your home décor consists of a few IKEA posters. The type of insurance you get will also depend on whether you're a landlord or tenant. If you're renting, you could already be covered (but don't assume this – best to ask).
One of the most important things to check is not what's included, but what's excluded. The last thing you want when dealing with financial or personal loss is finding out you're not adequately covered. Take your time to research insurance companies and their policies before you commit. You might even find it helpful to get your professional advice.
After your policy is in place, it's a good idea to check it yearly. You may have purchased items that won't be accounted for or have made home improvements that increase the value of your property. Or maybe you might have sold a big-ticket item that no longer needs to be included in your content inventory, so your insurance premiums would actually go down.