Homeowners insurance is a form of property insurance that covers losses and damages to an individual’s residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.
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Frequently Asked Questions
What is the difference between Mortgage Insurance and Home Insurance?
The main difference between Mortgage Insurance and Home Insurance is that Home Insurance provides coverage for the building, fixtures, fittings as well as renovations and your household content while Mortgage insurance is a policy which insures the mortgage (home loan) in event of death of the breadwinner – It provides the surviving spouse with peace of mind, knowing the mortgage will be fully paid up.
What is Fire Insurance and what does Fire Insurance covers?
Fire insurance is a property coverage that pays for damages to property and other losses you may suffer from a fire. It can pay for the cost of repairing or replacing damaged property in your home. Fire coverage is included in most homeowners insurance policies.
What is the difference between Contents Insurance and Building Insurance?
Contents refers to any physical and movable household items or personal belongings including money and valuables kept within the premises that belong to you or your family members.
Building refers to the building structure of your home. For Housing Development Board (HDB) flats, condominiums, apartments or cluster houses, it will include the building structure (but not the foundations), fixtures and fittings based on HDB’s or the property developer’s standard specifications. For landed properties such as bungalows, semi-detached and terrace houses, it will include the building structure (but not the foundations), garages, outbuildings, swimming pools, terraces, footpaths, driveways, gardens, gates, fences and other private areas you own and which the public do not have access to.
Home Content Insurance includes only home content while Home Content & Building Insurance includes both home content and building insurance.
Insurance for a home owner or tenant?
Depending on whether you are a home (property) owner/ landlord or tenant, your requirement for a Home Contents Insurance plan may differ.
A home owner has clearly vested interests in protecting his home contents against potential financial losses or damages.
A non-staying landlord may have concerns about the household items provided in a fully or partially furnished rented room/ apartment.
A tenant or renter, on the other hand, should be mindful of his own home contents and property and valuables and any responsibilities specified in the tenancy agreement
What is Renters Insurance?
Also called as tenants’ insurance, renters insurance is an insurance policy that provides some of the benefits of homeowners’ insurance, but does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. It provides liability insurance and the tenant’s personal property is covered against named perils such as fire, theft, and vandalism. It also pays expenses when the dwelling becomes uninhabitable. Due to renters’ insurance exist mainly to protect against losses to the tenants’ personal property and provide them with liability coverage but not to insure the actual dwelling. It’s significantly less expensive than a homeowners policy.
What insurance do HDB / Condo homeowners need?
With an existing property loan from HDB: HDB Fire Insurance is compulsory. Although not compulsory, getting a plan covering home contents and renovations would be appropriate to safeguard your belongings.
With an existing property loan from Banks: Usually, fire insurance is packaged with the loan. Getting a plan covering home contents and renovations would be appropriate. The MCST (Management Corporation Strata Title) insurance only takes care of the development (building) and common areas.
What is the difference between “Insured Perils” and “All Risk”?
“Insured Perils” are risks or events leading to a financial loss covered by an insurer.
These are examples of insured perils:
Fire, lightning, thunderbolt or subterranean fire Explosion Aircraft and other aerial devices and articles dropped therefrom Collision or Impact Bursting or overflowing of a domestic water tank, apparatus or pipe Theft accompanied by actual forcible and violent entry or exit Hurricane, cyclone, typhoon, windstorm and flood Earthquake or volcanic eruption Riot, Strike and Malicious Act
When a scope of cover is based on “All Risks” (fire being the common risk to be covered), it includes cover for accidental risks as well. In other words, “All Risks” cover can be viewed as an extension to “Fire and Extraneous Perils” thus making it more comprehensive in nature. As an example, theft cover in a “Fire and EP” policy requires theft to be accompanied by actual forcible and violent entry or exit to be claimable. However, in an “All Risks” policy, the insurers can offer the removal of the restriction “forcible and violent entry or exit” upon payment of additional premium to cover thefts which do not involve elements of force and violence.
An “Insured perils” policy will state exactly what perils (risks) are covered. Any perils not named in the policy are deemed not to be included for coverage. In an “All Risks” policy, all perils are deemed to be included for coverage unless specifically excluded.
What type of Contents Insurance is right for me?
Price is always a natural consideration but there are other factors worth thinking through in selecting your policy. Saving a few tens of dollars’ worth of premium does not outweigh potential risk exposure around your home. As a positive step toward risk management, ensure your plan is tailored to match your needs and circumstances at a reasonable price.
When comparing policies the focus should fall upon the following key factors besides price:
- “Insured Perils” vs “All Risks” – This determines how extensive risk exposures are covered under the plan.
- “First Loss” vs “Full Sum Insured” – This determines the value of the financial losses or damages claimable against the plan. Claims settled on a First Loss basis are without penalty for being under-insured. Under the “Average Clause”, the insurers can reduce payment on a claim by the percentage you are under-insured.
- Valuables – Home Contents Insurance normally has a sub-limit for unspecified items. For full-cover, valuables must be itemised for insurer’s review and additional premium. Examples of valuables are watches, paintings, works of art, jewellery, antiques, precious stones and other collectable items.
- Deciding sum insured for your home contents – The general rule of thumb is the replacement cost of your content should it be completely destroyed.
- Common exclusions – They may differ among insurers and hence it is prudent to take a closer look when doing comparisons.
Do I need to list down all household contents in order to be covered?
No, there is no need to declare or list down. The total value for the household contents is declared instead, representing the sum insured for the policy. To ensure your contents are appropriately covered, we would recommend you to itemise the major ones for a completeness check. Be aware that in the situation of claims the insurer may ask for evidence of sufficient coverage and for receipts of larger items.
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Disclaimer: Shaun is a registered general insurance agent with PromiseLand Brokers in Singapore. Generalinsurance.SG does NOT bear any responsibility for any decisions consumers or website users make, should they rely on the information they have obtained, directly or indirectly, from this website.