Demystifying home insurance in Singapore

Most of us tend to take the security of our home and its contents for granted. This means that we either do not have home insurance or, for those that do, the coverage is likely to be inadequate.

For those looking for suitable home insurance coverage, here are some considerations (the following points are based on Singapore home insurance law):

Risks covered in home insurance

Fire insurance is basic protection coverage and covers the building and/or its contents. According to the Singapore General Insurance Association (GIA), fire insurance generally covers the building structure, permanent fixtures and fittings, such as built-in cabinets, bathrooms, toilets, air conditioning units, fixed carpeting, parquet floors and other immovable improvements.

He can spread to cover dependencies such as garages and perimeter walls. However, foundations and pools are typically not covered by building fire insurance.

Most fire insurances offer coverage against damages caused by fire, lightning, domestic explosions, exploding or overflowing water tanks (leaks excluded), road vehicle strike, aircraft strike, malicious intent, riot and strikes, earthquakes, windstorms and floods, robbery or attempted robbery accompanied by forced or violent entry. Depending on the insurers, other risks such as landslides due to wind storms and flooding may also be included.

Valuing your property

The general rule is that the sum insured is the replacement cost of your property, should it be completely destroyed.

To help homeowners estimate the sum insured, the GIA website www.gia.org.sg provides a guide in the form of a replacement cost table. The latter is based on built-up area and development type for private residential housing. Property owners should also remember to secure professional fees and debris removal/temporary works. One point to note is that the bills for these 2 items can be VERY substantial and are normally not covered unless specified in the home insurance policy as most policies only cover the cost of rebuilding the property.

Average Clause

The principle behind the average clause is that insurers can reduce the payment of a claim by the percentage that you are underinsured.

So, assuming John has a total of $20,000 worth of items in his home, but he insured the contents for only $10,000. His home was broken into one night and he lost $5,000 of which he filed his claim for the same amount. However, the insurer refused to pay the full claim of $5,000.

By insuring its contents for only half the correct value, the insurers would award John only half the amount of the claim, in this case reducing it from $5,000 to $2,500.

Protecting your valuables

If you have expensive jewelry, watches, or pieces of art, we recommend that you declare them to your insurance company and provide documentary evidence such as receipts or appraisal reports, as insurers will insure your valuables as a specific item or as a blanket under global coverage. . The latter ensures that even if you lose the insured item abroad, it will still be covered.

common exclusions

Common exclusions include war and terrorism risks, nuclear risks, subsidence or landslides. Contents such as deeds, bonds, stamps, banknotes, manuscripts, medals, coins, documents of any kind and deliberate damage or loss are also excluded.

If you live in an area prone to flooding, some insurers may deny coverage or increase the premium. If your property is going to be vacant for long periods of time, insurers expect to ask for how long.

Now that you’re equipped with the right knowledge, happy Singapore home insurance hunting!