This article was first published by Insurance Market
Home is the place where any life story begins. In Singapore depending on which life stage we are at, most of us would have updated our home addresses more than once. Moving house is definitely a very stressful but yet exciting event in our life. Other than deciding what household items to keep or discard, key decisions lie in the location of next home, housing type and conceptualisation of home interiors. By the time we are done securing housing loans, executing renovation plans and shopping for new household items, we are more or less at the touchdown end of our Home project. The final step would probably be drafting out our guest list for upcoming housewarming party. Is that really all we need to do?
Make your HDB Home Complete
According to HDB Annual Report 2014/2015, the estimated percentage of Singapore resident population living in HDB sold flats stands at 79%. For many HDB flat owners, the home represents the key asset in their net worth. So, from a risk management perspective, it is a prudent move to take up property insurance. Freak accidents (e.g. fire or flooding in HDB flats especially low-floor units caused by sewerage litter, unattended cooking equipment) do happen beyond our reasonable expectation.
While it is not a strict rule for private property owners to buy insurance, it is a prudent practice to protect your property. It is common knowledge that when taking a home/ mortgage loan from the bank in Singapore, the loan borrower is usually expected to buy fire insurance from the bank’s appointed insurer as a loan requisite. In the case of an HDB housing loan, it is compulsory to buy the HDB Fire Insurance policy. For HDB flat owners with fully paid-up loans or no loan to begin with, maintaining home insurance policy is a smart choice.
What if a fire breaks out in your home?
Etiqa Insurance Pte Ltd is the appointed insurer for the HDB Fire Insurance Scheme. This Scheme was launched to help relieve HDB flat owners of the financial burden of repair work if a fire breaks out. This policy covers the cost of reinstating damages caused by fire to the flat’s internal building structures, fixtures and fittings. The policy also covers areas built and provided by HDB and its approved developer but excludes household contents. The policy is valid for a 5-year period; renewal is done once every 5 years. From 16 August 2014 to 15 August 2019, the 5-year premiums (including 7% GST) are as follows:
|Studio Apart. (A)||$3.50||$29,000|
|Studio Apart. (B)||$4.00||$37,200|
The HDB Fire Insurance policy does not provide protection for any contents in our home, it is therefore important for us to identify a solution that will bridge this protection gap.
How to insure for fixtures, fittings and renovation/ improvements?
It is estimated that the average renovation spending over the years by Singaporeans for HDB flats ranges from $35,000 to $56,000. This excludes furnishing and household appliances. The choice of interior style plays an important role in the overall renovation spending. Furthermore selection of BTO flats (Build-to-order) over resale HDB flats does matter. BTOs are usually unfurnished, meaning empty space would need to be filled up from scratch. Generally, the larger the floor area, the more expensive the renovation works and that could range from $20,000 to $50,000. On the other hand, the degree of renovation is dependent on the condition of a resale unit. With additional charges for hacking/ replacement works and teardowns, the renovation cost would set us back anywhere from $50,000 to $90,000. Renovation spending is not necessarily commensurate with housing type and floor area. Think about what you have included in your renovation works and that should be an appropriate guide to decide how much your Sum Insured is to protect “fixtures, fittings and renovation/ improvements”.
How do I determine the Home Content Sum Insured
Remember you were so busy and focused on where to shop for your new household items? Adding that finishing touch by placing your last household item in place just brings your entire home alive with cosiness and a sense of achievement. They are your home contents. Let us retrace our steps to the shopping list.
In order not to overlook any of them, one way is to itemise them according to their location – different sectors in the home.
- Living area: HDTV, sound bar, entertainment system, sofa set, coffee table, curtains, display cabinet, desk phone.
- Dining area: Dining furniture, decorative vase, stand fan, radio.
- Kitchen area: pots and pans, rice cooker, steamer, refrigerator, microwave oven, slow cooker, air fryer.
- Yard area: washing machine, dryer.
- Store area: shelves, vacuum cleaner, ladder, handy tools.
- Master bedroom: King size bed, dressing table, wardrobes, drawers, curtains, mobile phones, jewellery, safe, watches.
- Children’s bedroom: bed(s), study table, book shelves, wardrobes, printer, laptops, tablet, camera, calculator.
Look around your home and use the guide above to work on your own list. In no time you should have covered 80-90% of your household items (home contents). Put an estimated value to each item and the aggregate value would be a reasonable Sum Insured to protect your home contents.
Any other coverage not mentioned above may be of value depending on one’s circumstances. Pet dog cover is obviously relevant to pet dog owners. 24-hour Emergency Home Assistance Service (e.g. $100 reimbursement per stated event subject to a maximum number of events) would be useful to any home owner. Free extension cover may include loss or damage to domestic servant’s personal belongings. Households with maids would therefore find this benefit useful.
Why should I consider all risk coverage?
Before finalising your Home Contents Insurance plan, you would probably have one more question. Is a Home Contents Insurance plan better off with covering “fire and other named risk exposures” or covering “all risks” (this includes loss or damage due to accidental means)? Contemporary HDB flat designs feature more use of glass e.g. full height windows, sliding glass doors. In this respect, using an “all risks” plan would be worth your consideration and investment. One important point to note is that although it is common for many insurers to offer Home Contents Insurance plans based on insured perils (fire and other named risk exposures), there is no standard list of insured risks among the insurers. Hence before committing to an insurer, do ensure the terms provided in the policy match your home insurance needs.
Take action and complete your HDB Home
Don’t wait any longer and cover your home with more confidence and clarity to your choice of plan to complement HDB Fire Insurance plan, start reviewing your Home Insurance needs today. Know you have a clear understanding what kind of Home Insurance you need.
Did we miss anything or do you have any remarks or questions, please add them below, or you can also send us an email and we are glad to answer them.
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