This article was written in collaboration with AXA. All views expressed in the article are the independent opinion of DollarsAndSense.sg
In Singapore, many of us own our own homes. The majority of us live in HDB flats where we spend a good amount of time choosing the right flat that we wish to live in, getting the right interior designer to help us achieve the dream home that we want and of course, spending time and money in furnishing our home to the best of our abilities. In fact, HDB flat owners can easily spend $50,000 or more renovating their home.
However, some homeowners pay lesser attention to the insurance coverage for their flat. Yet, not insuring our homes is one of the biggest financial mistakes that we can make.
Your HDB Flat Is NOT Automatically Insured
Some HDB owners have the misconception that their HDB flats are automatically insured. They are wrong. Our HDB flats are not automatically insured.
What leads to this misconception is due to the fact that HDB flat owners do need to buy a compulsory basic fire insurance policy to cover the internal building structures, fixtures and fittings provided by HDB, if they have an existing HDB mortgage loan. This leads some flat owners to think that their flat is insured, even when it’s not.
The basic fire insurance policy does not cover our renovation work, additional fixtures installed or household content. If a fire, pipe burst, explosion or any other incident occurs, the damages sustained will have to be borne by us, the flat owner, unless we have bought a separate home content insurance.
In addition, we may also be liable for any third-party damages caused to your neighbours’ homes, if we are found to be responsible.
By not having home content insurance to protect our homes, we, as flat owners, run the risk of incurring a heavy financial loss if our homes are damaged.
Scenarios That Could Lead To Significant Damage In Your Home
Since Singapore is situated within a natural disaster-free area, many of us may take the safety within our home for granted. However, there are still scenarios that may occur which could lead to significant damage in our homes.
|Scenarios||What Happens||Estimated Damage|
|Fire In The Kitchen!
|A kitchen fire can result in damages to your oven, cooker, hood, hob, lighting, cabinets, water piping, electrical wiring and wall tiles.||The estimated cost of fixing the damages could be $20,000.|
|Washroom||What if the pipe bursts and floods your toilet? If the flood also damages your neighbour’s apartment you will be liable for the repairs.
|Fixing a burst pipe and the resulting damages can cost $25,000.|
|Living Room/Bedroom||An electrical fire can damage your contents. The cost of replacing your TV, wardrobe, furniture, and other electronics can be extensive
|Fire damage to fixtures, fittings and the resulting renovations can cost $100,000.
Source of Information: SmartHome, AXA
AXA SmartHome: An Insurance Policy That Home Owners Should Consider
Aside from life and health insurance, home content insurance is one insurance type that everyone who owns a property should have. Home content insurance complements, rather than replaces, the compulsory HDB fire insurance that we may have bought for our HDB flat.
To get a better idea of the various coverage provided by a home content insurance policy, we take a look at AXA SmartHome.
# 1 Building And Fixtures, Fittings & Renovation
This can be broken down into two parts.
Building: Building refers to the apartment or HDB flat which includes the building structure, fixtures and fittings based on the standard specifications provided by the developer or HDB.
Fixtures, Fittings & Renovation: This will refer to additional work that you spend renovating your home. It includes the cost of built-in cabinets and wardrobes, floorings, kitchen fixtures, feature walls, false ceilings as well as electrical works.
Based on the building sum insured, up to 25% can be used to insure for the fixtures, fittings & renovation. For example, if the building sum insured is $500,000, $125,000 (25%) can be used for coverage for fixtures, fittings and renovations.
# 2 Home Content
We will also have other contents such as sofa set, TV, dining table, washing machine and refrigerator in your home, which need replacement if they were damaged in the incident. These items are covered under the “Contents” Section, which pays for loss or damage to moveable items within our home which belongs to us, our family members or your domestic worker.
Other types of contents within our home that are also covered include money, electronics such as laptops and mobile phones as well any other valuables such as watches, jewellery, bicycles and even works of arts.
# 3 Worldwide Personal Liability
One of the most overlooked areas of insurance is the legal liability that we become liable to pay for if there any accidental bodily injury or death to others and/or their property.
Below is a non-exhaustive list of possible scenarios where we may be liable to pay someone in the event of injury, death or damages to their property.
Fire Which Started From Your Home:
Fire can easily spread from one home to another. If we or a household member of ours is found to have accidentally caused the fire from our home, we may be liable to pay for damages sustained by our neighbours, if they choose to pursue legal action against us.
Accidents To Others Within Your Home:
If a person gets injured in our home, we could be liable for any injuries caused.
If incidents such as the ones mentioned above occur and we are found to be liable for any damages, the Worldwide Personal Liability benefit will provide us with the necessary protection. The AXA SmartHome provides a coverage of up to $500,000.
How Much Should I Be Covered For?
As a rule of thumb, we should ensure that the sum insured should be at least equivalent to how much we have spent on our home.
Do note however that in the event of an incident such as a fire, the cost of reinstating a flat back to its original condition may be a lot higher than what it originally cost us the first time around due to clean-up works, demolition works, additional repair works and even price inflation. At the same time, we may also be liable for damages caused to the properties around us.
How Much Will Home Insurance Cost Me?
Getting an online quote for the AXA SmartHome is easily obtained. You can check it out on the AXA website.
Step 1: Fill in your coverage requirement
You can choose the coverage you want for “Building Sum”, “Content Sum” and also the occupancy status for the property.
Step 2: Get your quote, choose your preferred plan
You can choose between the “All Risks” or “Insured Perils”.
The main difference between the two plans is that “Insured Perils” provide coverage for your home against losses or damage arising out of specified causes while “All Risks” provide coverage against wider range of situations.
Step 3: Confirm the details
After selecting the plan, you will be shown a product summary. Once you confirm it, you will be asked to fill in your personal details and before making your payment.
Once payment is made, your home is insured!
Do Not Take The Risk Of Not Insuring Your Home
Not insuring your home is a risk that isn’t worth taking, especially since home content insurance is relatively inexpensive to buy.
With the ability to customise your coverage level, the AXA SmartHome can be tailored to provide you with the coverage that you need. Premiums are based on the coverage that you select.
Best of all, you can get all the information that you need and even complete the transaction online.
To get an insurance quote today for SmartHome, you can check out the AXA website.