Singapore property: 3 type of insurance you need to know about
For most Singaporeans, owning a home is arguably the most important purchase in their lives. The process to own a home is not cheap and has with lots of hidden costs. Statistics show that majority of homeowners spend more time researching on how to renovate or furnish their homes and less time in securing what they already have. Insurance your property is equally important, more so when you home have sentimental attachments.
Make no mistake about risk. We have seen homes engulfed in fire, theft, water pipes bursting and sometimes repossession by creditors. If you are wise, then you must be one of those who will not but their homes in line. Here are 3 types of insurance you can use to protect your home.
Fire insurance is a primary kind of protection of homes in Singapore. Do not let the name confuse you. Fire insurance cover other perils besides the fire itself. They include gas pipe explosion, smoke damage, malicious damage, water pipes bursts, lightning, rots and other malicious damages.
Sound interesting, right? However, it’s important to note that fire insurance only cover the cost of damage to your home structure including rebuilding your home and replacing original fixtures. Original fixtures include original walls, doors, windows, ceiling, flooring, etc.
In simple words, fire insurance covers structural damage arising from the above hazards but does not include items inside your house, e.g., furniture, personal belongs and renovations. If you own an HDB flat, the house will by default be enrolled in the HDB fire Insurance Scheme unless you choose not to.
Home content insurance
Home content insurance complement fire insurance, covering items inside your house, renovations in case of a hazard. Renovations include enhanced flooring, air-conditions, built-in wardrobes, etc.
House content include clothing, electronics, jewelry, appliances, furniture, etc. Note that if you have expensive stuff like art pieces, costly wines, Rolexes you will need to cover them in a separate endorsement.
Home content insurance provides additional benefits to help recover from peril in your home. This insurance is not mandatory but is worth considering. The premiums you pay for-home content insurance is not calculated by the size of your house but on the sum insured. The sum insured is equal to the comparable cost of home content, fixtures, fitting and renovation.
For most Singaporeans, their home mortgage is their single largest liability. Not able to service the mortgage have drastic consequences as your credit holds the title deed and has the mandate to sell off your property and recover the money you owe them. Mortgage insurance comes in if something happens and you can no longer afford to repay your home loan. HDB dwellers who use CPF funds must be insured under the CPF Home Protection Scheme. If not using CPF to service your HDB, you can opt to be covered under HPS.
Have you covered your home with the above insurance? If not, it time to take action and enjoy the peace of mind years to come.