Ask The Expert: Home Insurance And What You Need To Know

What your policy should cover and the questions to ask your insurance provider.

By Olivia Lim      16 August 2021

Whether you are buying your first home insurance policy or want to update your current policy, knowing the basics on home insurance is key. Zelene Lin, Head of Personal Property and Service Programs at AIG Singapore, shares some tips on why home insurance is important and how to decide which policy best suits your needs.

Q. Why do I need home insurance and what should it cover?

Zelene: Your home is likely one of the most valuable assets you have. Many are not aware that basic fire insurance only covers the property’s physical structure and that basic HDB fire insurance covers only your unit’s structure in the original state it was built. They usually do not cover the things that make your house a home. Beyond just its four walls and ceiling, your home includes your treasured belongings, contents and memories.

A comprehensive home insurance covers more than structural damage to your home. It also covers your renovation works (such as built-in carpentry, cabinets and lightings), contents (such as your personal belongings, furniture, home appliances), and liability coverage against third party property damage or bodily injury which you or your family member may be liable for.

Having a home insurance policy helps provide you with a financial safety net and peace of mind if the unexpected, like a flood, fire or theft, occurs.

Q. What types of coverages are available for home insurance policies?

Zelene: In general, a home insurance policy will usually include the following type of coverage:

– Building / Fixtures and fittings
– Contents
– Valuables / Personal Effects
– Personal Liability

There are 2 types of coverage in the market:

Insured Peril Coverage: covers only events that are specifically listed in your policy such as fire, flood, and theft by violent and forcible entry. Given that the coverage is very specific, these products usually come with other benefits such as alternative accommodation. The premiums are usually also more affordable.

All Risk Coverage: covers any events that may cause loss or damage unless specifically excluded in your policy. The coverage is much broader. Such products usually allow you to customise your coverage to suit your needs.

At AIG Singapore, we understand the different needs of homeowners and have designed specific insurance products for homeowners of different types of dwellings, as well as for tenants and landlords.

Q. How do I decide which policy is best for me and my home?

Zelene: There are two factors to consider when purchasing home insurance:

1. Are you the homeowner, tenant or landlord?

If you’re the homeowner: Consider getting a home insurance plan which covers your belongings, renovations, alternative accommodation expenses, and utilities bill reimbursement in the event of an unfortunate covered incident such as fire.

If you’re a tenant: If you rent your home then you need not worry about building cover. However, you should still get coverage for your contents such as your personal belongings, furniture, electronics, appliances or other valuable items.  You would also want to consider including a tenant liability coverage to cover your legal obligations towards the landlord.

If you’re the landlord: Home insurance is important as it protects your home and the contents you provide to your tenant, such as furniture and appliances, which may be damaged in the event of an unfortunate accident caused by your tenant. Coverage for your legal obligations towards your tenant should also be included to ensure that you are adequately covered.

2. What is the value of your home’s content?

Every home is unique and designed to suit your lifestyle. A good gauge for you to estimate the value of your home contents would be to tally the costs of your personal belongings, furnishings, home appliances and valuable items in your home. For example, AIG’s Enhanced Public Housing Content Insurance offers up to $100,000 content sum insured for customers residing in HDB flats.

Q. If the insurance covers furnishings and electrical appliances, do we have to provide the purchase receipts to claim? How do we make the claim if we don’t have the receipts?

Zelene: In the event of a covered loss, we will usually ask for the receipt as proof of ownership. If the receipt is no longer available, you can provide other proof of ownership such as credit card purchase transaction slips or online purchase transaction records.

Q. Is it wise to pay a lot for home insurance or just stick to the basics? What percentage of my income should go to home insurance?

Zelene: Generally, the cost of home insurance isn’t high as most damages are caused through accidents or human negligence, rather than by natural disasters. The annual premium for AIG’s basic home contents insurance starts from $70.62 per year which works out to be just $0.19 per day!

Home insurance is meant to cover the costs of restoring your home to its previous undamaged state. The amount of coverage must be sufficient to restore your home’s structure, redo your renovations and replace your personal belongings, damaged furniture, home appliances, electronics, and valuables you have at home.

Q. What questions should I ask my potential insurance provider?

Zelene: Here are some suggested questions:

– Besides fire, does the policy cover other perils such as flood, explosion of domestic appliances, bursting of domestic water tanks, theft by violent and forcible entry, etc.?

– How long does it take for claims to be processed? (Note: This varies between insurers and the complexity of claims. To speed up your claims report, call your insurer immediately after the incident occurs.)

– Does the coverage include tenants?
(Note: Not all home insurance policies are suited to landlords. Some policies may not cover damage caused by tenants.)

Q. Can I customise my insurance policy to focus more on my preferred coverages?

Zelene: Yes! Here at AIG Singapore, we offer both packaged and customised products. To find out more, please call our customer service hotline at 6419 3000 on weekdays 9am to 5pm. Our customer service officers will be happy to address all your queries.

Q. When do I need to update my policy?

It is advisable to review your coverage from time to time. For instance, if you have just spent $200,000 renovating your home’s interior or installing a smart home system, or if you have bought new furniture, you may wish to upgrade your existing coverage for better protection.

SAFRA members will receive a S$50 Decathlon voucher upon signing up for an AIG Enhanced Public Housing Contents Insurance 5-year plan. Promotion period is from 16 August to 30 November 2021. For more information, go to www.safra.sg/EPHCI 

Share your home insurance tips with us at magnsman@sph.com.sg!