Home Insurance policies in Singapore
Is home insurance policy compulsory?
If you are taking out a mortgage with a bank, then you must have the fire insurance policy for your home. Some banks are offering this policy free for the first year if you take out a mortgage with them.
What are the types of home insurance policies available for private properties?
There are two main types of policies: a standard fire policy that covers losses caused by fire, lightning and explosion; and a home insurance policy that covers destruction to a building, home contents and any renovations carried out.
Which policy should I buy?
The decision to buy an insurance policy for your home is similar to buying a life insurance policy. You have to consider your budget, and your exposure to risks in your daily activities. If your estate is prone to vandalism, burglary then you should include these items as contents to insure against.
What are covered under the home insurance policy?
In addition to the damages caused by fire, explosions and lightening, the home insurance policy also covers against fire, flood, burglary, vandalism and damage by vehicles, aircraft and other aerial devices.
What are covered under the fire insurance policies?
They cover damages caused by fire, explosions and lightning.
What should I look for in the policies?
Items covered : Does the policy cover personal accident and liability, loss or damage to valuables outside the home premises, in addition to the building, renovation and home contents.
First loss or average clause : Does the policy cover the full or only a percentage of the loss if you have under-insured your property? First Loss Policies are policies that owners don't have to fully declare the total value of the contents and building but they would be paid for risks such as fire, theft, busting of pipes etc. Average Clause is a Clause that states that owners have to fully declare the total value of the home contents and building to be paid the full loss in the event of a claim. If not, only a percentage of the loss would be paid.
Definition of terms : How are the risks defined in the policy? This is because different insurance companies define risks differently would pay different amounts in the event of a claim.
Excess clause : There is a minimum amount you must bear for yourself for every loss except in the event of fire. As the amount can be from $50 to $200 for each item, it would be advisable for you clarify with your insurance agent.
How do I make a claim for my insurance?
To make a claim, you have to provide the following documents:
as a police report in the event of a break-in;
receipts if items of a certain value are lost or damaged, and
invoices of renovations done on the property
Should I over-insure or under-insure?
Generally, it would be better to over-insure than under-insure. This is because some insurance companies penalize owners for under-insuring. Moreover, it makes sense to over-insure by about 5-20% of the potential costs reconstruction as one tends to add new the contents to a home.
How much should I spend on insuring my home?
You should use the potential cost of reconstructing your home as a guideline. The cost of reconstruction should include the cost for renovations and the home contents. However, do bear in mind that the less you insure, the less you can claim if a mishap occurs.
Do I need to review my policies annually?
Yes. You should try to review the policies annually to accommodate any changes to the contents in your home, or renovations to the property.
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