And these days, rather than digging a ditch around your abode and adding crocodiles, protecting your home means getting homeowners insurance.
Here’s a guide to home insurance and the best plans in Singapore, depending on the type of property you live in.
Wait a minute, I already have HDB fire insurance…
If you had taken out an HDB loan to buy your apartment, you would have been obliged to take out compulsory HDB fire insurance. We don’t blame you for thinking you’re already covered on the home insurance front.
But fire insurance is a different beast than home insurance.
HDB fire insurance is intended to cover repair costs if your apartment is damaged by fire. But coverage only extends to internal structures, facilities and areas built by the HDB.
It does not cover furniture, renovations or personal effects in the apartment. That mezzanine loft you added during a renovation? Not covered. That crystal chandelier you installed to channel the Phantom of the Opera? Not covered.
Home insurance, on the other hand, offers much broader coverage than fire insurance. It not only protects your home itself (i.e. the building), but also the contents inside, such as furniture, renovations, and appliances. Depending on your policy, this may even include your laptop or jewelry.
You also don’t have to suffer fire damage to make a claim. Most policies will compensate you for various incidents such as flooding and burglary.
ALSO READ: HDB fire insurance vs home insurance: what’s the difference?
How to choose home insurance?
When buying home insurance or homeowners insurance, the three main factors to compare are:
- Home Contents Coverage – Your home is where expensive devices like your refrigerator, TV, and computer live. So check the definition of home contents in the policy to make sure these items are covered. Also make sure it covers your other prized possessions, like that Brompton bike or your Magic: The Gathering collectibles.
- Renovations – Your renovation probably cost a bomb. In the event of fire or water damage, restoring your home to livable condition will be a hole in your pocket. So make sure all renovations, fixtures and fittings are protected.
- Premium – Of course, price is an important factor. Fortunately, it’s easy to compare home insurance plans on MoneySmart.
Other coverage types and considerations include:
- Personal Liability – Most plans protect you from legal liability if something unfortunate happens in your home. For example, if your PMD loader catches fire and destroys your entire block, you won’t have to worry about being chased by your neighbors.
- Alternative accommodation – This benefit usually pays for a number of days of accommodation if you are forced to leave your accommodation temporarily.
- Other Benefits – Some plans will cover you for things like cash, personal effects, valuables, electronics, or pets. Some also offer personal accident coverage for your household.
- Insured Peril vs. All Perils – All Perils plans cover you for all incidents except those that are explicitly excluded, while Insured Perils policies only cover you in the circumstances identified in your contract.
5 Best Home Insurance for HDB Apartments
Most home insurance providers in Singapore have helpfully packaged their plans and coverage based on the size of HDB apartment you live in, so you will find 3 room apartment plans, apartment plans of 4 pieces, etc.
Here are the 5 most advantageous home insurance policies for a 4-room HDB:
If you live in another type of HDB apartment, go to the MoneySmart Home Insurance Wizard to compare home insurance policies for your apartment size.
READ ALSO: Do You Really Need Home Loan Insurance?
5 best home insurance for private property
Private property runs the gamut, from shoebox condos to sprawling landed homes, so you’ll need to assess your needs and determine the appropriate level of coverage.
Here are the most affordable home insurance plans we’ve found for a modestly sized condo (2 bedrooms):
As you may have noticed, some of the plans above do not include building coverage or require you to purchase optional building coverage. Indeed, for many condos, it is the responsibility of the management committee to take out fire insurance for the entire property.
If you live in a house, consider a home insurance adapted to land ownership. These plans generally provide greater coverage of the building.
How much home insurance do I need?
Unless you have experience working in the construction industry, your need for building coverage can be difficult to estimate. You should calculate the cost needed to restore the property, including renovation, if something happens to it.
Imagine your house being destroyed by fire or flooding. How much would you spend to redo the floors, walls, etc. ? The size of your home and the value of your renovations will play a large role in determining the cost. For example, that chic marble floor or those custom wood panels can be expensive to replace.
When assessing your home contents coverage needs, you also want to estimate the total value of what is inside your home. You’ll want to focus on the more expensive items, such as electronics, appliances, jewelry, watches, and expensive furniture.
I am a tenant. Do tenants also need home insurance?
As a tenant, you may be thinking: this is not my property. But you might still consider homeowners insurance, as it may protect the belongings you own, not the owner. It can also cover you for costs that your landlord is not responsible for.
For example, if there is a fire or a flood at your home, your landlord may have to deal with the costs of renovating and restoring the property. But if you are contractually obligated to repair and maintain the AC unit, refrigerator, and toilet, you may have to pay to have them repaired.
In addition, the cost of lost or stolen personal effects or personal electronic devices will of course not be borne by the owner.
In reality, most renters in Singapore do not purchase home insurance. But it’s worth considering if you’re living in Singapore for the long term and want to protect a lot of high-value assets.
READ ALSO: 4 home insurance mistakes that will cost you dearly
Does home insurance cover mortgage payments?
Home insurance only covers your physical home and its contents, which have nothing to do with your ability to meet your mortgage payments.
There is, however, another product called mortgage loan insurance that will pay off the remaining money on your home loan if something happens to you (usually death or total and permanent disability). This saves your family from paying the bill on your behalf or risking losing their home.
How do I file a home insurance claim?
So the poop has hit your new ceiling fan, literally or figuratively, and you need to make a claim.
The first thing to do is contact your insurer immediately by calling your agent or dialing the company‘s hotline. Most insurers have a time limit, usually around 30 days, within which you must submit your claim.
You will be asked to complete a claim form and attach supporting documentation which, depending on your situation, could include the following:
- Appraisal reports showing the cause of damage and an estimate for repairs
- Receipts for damaged goods
- Proof of damage, including photos
- Police report in case of break-in or theft
- SCDF fire report if a fire is involved
- Personal contact details and contact details of third parties and witnesses, court documents and photographic evidence in the event of civil liability