You could probably remember it as if it was yesterday. After viewing a very impressive-looking show flat, you signed the Option to Purchase for your dream condominium. Years later, you received news that your unit will be receiving the Temporary Occupation Permit (TOP), which allows you to commence renovation works and finally move in.
Between choosing the right furniture and planning for a grand housewarming party, probably the last thing on your mind is to get home content insurance as soon as possible. And that, is one of the biggest, most costly mistakes new homeowners could potentially make.
Perils Of Moving Into A New Condominium
We all know that any time we buy something like a new phone, appliance or car, we should use it as much as we can, even going to the extent of “stress testing” it, just to see if there are any issues with it. The same principle applies for a new house.
The first few months of moving in will be the time you will discover any defects, flaws or problems within your home, that might not be uncovered by a cursory inspection of the house.
Perhaps there is water seepage during particularly heavy downpours. Or the sewage might choke up during peak usage periods. Maybe there are electrical issues when all your appliances are being used at the same time.
Other incidents that could leave your home damaged include flooding, particularly if you stay on the ground floor as well as if there are bursting or overflowing of water tanks and pipes. Depending on the extent of the flooding, this can also cause you significant losses if your furniture, electrical appliances and flooring get damaged.
Another reason why the first few months after your condominium’s TOP is the most critical: renovation works (by both your neighbours and yourself). Renovation works in a new development is the time when chances of accidental damages is the highest.
Also, in new developments, its not a stretch to imagine that the ever-present risk of burglary would be higher. A combination of factors add up: not all the tenants have moved in, security systems may not be fully operational, and the many renovation projects mean that there are many strangers moving around the compound. Losses could include money, jewellery and other valuables you keep at home.
Wait, Isn’t My Condo Already Insured By Default?
Your condo’s Management Corporation (MC) would have purchased insurance coverage for the common areas, buildings and the original fixtures provided by the developer. This kind of insurance is known as fire insurance, though it covers a lot of other perils other than fire, including gas pipe explosions, lightning, water pipes bursts, smoke damage, malicious damage, and even riots.
However, it is important to note that fire insurance only pays for reinstating damage to your home’s structure and original fixtures. It does not cover losses relating to your renovations, furniture and contents within your home.
In other words, fire insurance only covers structural damages arising from the above-mentioned perils, but does not cover the contents inside your home like furniture, renovations and personal belongings. For that, you will need home contents insurance.
Why You Need Home Content Insurance
A home content insurance policy complements fire insurance by covering just about everything inside your house, including your renovations and household contents.
If you spent $50,000 renovating your home, and another $25,000 on your furniture, you would be facing a hefty loss in the event a fire destroys everything in your home.
In addition to the losses sustained from a mishap, there are other costs that homeowners may not realise they will incur, including the loss of any money and valuables kept at home as well as paying for alternative accommodation in the interim period when reinstatement and renovation works are being carried out.
Home content insurance also covers your personal legal liability for expenses or property damage you might have accidentally caused.
Review Your Home Content Insurance Policy Regularly
Many things can change in a year, especially your first year. You would likely have made new home improvements or purchased new appliances. You should review your policy at least annually to ensure any new high-dollar purchases or renovations are covered. If the dollar value of the items in your home changes drastically, you might also want to see if the sum insured on your current plan is still adequate.
Learn More About Protecting Your Home Today
Having spent so much on buying your dream condominium, and even more on renovating and furnishing it, it will be wise to protect it with sufficient insurance. For more information, including how much you should get insured for, head over to our article on buying home contents insurance.