In January 2015, Baey Yam Keng, MP representing Tampines GRC, asked in the Parliament why home insurance was not compulsory for all home buyers.
Desmond Lee, the then Minister of State for National Development, had replied that even though it isn’t mandatory, homeowners should buy themselves a home insurance. He said everyone should “ensure they have the financial means to repair their properties”.
We work for 4 to 6 years and buy ourselves a home. That much time may not be enough for us to have built enough funds to cover unexpected losses to our most precious property.
Mandatory or not, spending a few hundred dollars every year on insurance is easier than having to fork out five or six-digit figures for calamities such as fire or theft. Home contents insurance and comprehensive home insurance come at premiums ranging from S$70 to S$400 annually, and can help you out with a range of problems your house could cause you.
HDB loans come only with basic fire insurance
When you take an HDB loan you will have to buy a basic fire insurance policy. This became mandatory from 1 September 1994. In fact, these days even banks will insist that you take a basic home insurance policy (or mortgage insurance) alongside your home loan. For banks, it is a security towards the loan amount they’ve given you.
However, do you know that this covers ONLY fire hazard? And you’ll get payments only on the cost of repairing the physical structure of the building that got damaged in the fire.
The furniture you lovingly chose, the paintings you adorned the walls with, the renovations you made on the original structure, the clothes you stuffed your wardrobe with – none of them will be covered.
What you need is home contents insurance
If you want every single thing inside your house – along with the building – insured, you need to take a comprehensive home insurance cover. This includes fire, flood, lightning, earthquake, explosions, and other hazards, plus the contents of your home.
Here are some interesting things you didn’t know the comprehensive home insurance or home contents insurance can cover:
1. Food in your freezer
Let’s say you went on a holiday to Bali. While you were away, power failed at your house and your refrigerator got switched off. You come back home to the smell of rotten food.
Most comprehensive home insurance plans in Singapore cover the food in your freezer or deep storage unit against power failure. An average policy will allow you to claim around S$250 per occurrence.
2. Bicycles on the premises
If yours or your family members’ bicycle gets stolen from your building, you can totally claim for reimbursement. You can claim around S$300 per bicycle.
3. Cyber theft
So, many policies cover your basic losses of personal documents and credit cards. But have you heard of the AXA SmartHome Optimum with its wonderful Cyber Protector Rider? It insures you against identity theft, unauthorised internet or card transactions, online shopping disputes, and defamation. Beat that!
4. Water woes
Now we Singaporeans know a lot about water problems, don’t we? What we mean here is insurance for the cost of repairing burst water pipes, or damage caused due to overflowing of water from tanks or pipes.
One of the companies that gives this option is the NTUC Enhanced Home Insurance. And nah-hah, you won’t be able to make a claim if it is caused by your negligence!
5. Belongings of your domestic help
Suppose you have a household helper, and he or she drops their glasses from the third floor of the building accidentally. Ta-da, make a claim with your home contents insurance! You can claim up to S$1,000 for each item.
6. Belongings of your guests
Yes, you heard that right. Suppose you have a guest staying over and something valuable of theirs is stolen from the house. Comprehensive home insurance to the rescue!
7. Living expenses if your house is under repair
If your home is being repaired and you need temporary accommodation – say a rental house, a home insurance policy such as Chubb Home Insure can cover that. You can claim up to S$18,000 in some policies.
8. Pets
Even if you don’t have a pet insurance while having a couple of dogs and cats in the house, your home contents insurance will cover the accidental death of pets (usually only dogs and cats), theft of pets and damage caused to another person by your pet.
So, you no longer have to worry about that irritating neighbour who always ends up putting their hand in your German Shepherd’s mouth all the time.
Meanwhile, don’t forget…
A comprehensive home insurance plan covers a lot of interesting things. But some of the coverage mentioned here may not be part of the original plan. You may have to add them as extensions to the policy, thereby increasing the premium amount.
Secondly, you may have to pay excess for each item, and that may not be worth the reimbursement in the end. Excess is an amount you are required to pay before making a claim.
So before you jump around and start claiming for all your covered items, read the fine print of your policy document and prioritise what you really want reimbursement for.
Also READ: 3 Types of insurance you should consider for your child