People purchase home insurance for the same reason they buy any insurance – to ensure financial peace of mind should the unfortunate happen.
Thankfully, home insurance premiums are fairly affordable.
For example, you can get your home covered for just over $4 a month with Aviva's Home Insurance1.
But most people probably don't have any idea what insurance they need for their home, what's covered and more importantly, what's not covered in their policy.
We've rounded up some common questions (and answers!) which will tell you all you need to know about protecting one of your most prized assets.
Question #1 – What exactly does home insurance cover?
Home insurance covers an extensive list of items ranging from household to personal items and even your pedigree pet in the event of accidents such as fire, flood, theft, explosion, bursting or overflowing of water pipes or household apparatus, or vehicle impact for those who live on a landed property.
Question #2 – I already have HDB's mandatory Fire Insurance Scheme, do I still need to buy my own Home Insurance?
Most people often mistake building insurance and home contents insurance to be the same thing. But in actual fact, they are two separate plans which provide coverage for different things.
The HDB fire insurance policy only covers damage to the structure of your building whereas Home contents insurance provides cover for your household contents and renovation work.
It's recommended that you should maintain the HDB Fire Insurance policy or such similar coverage, and also protect your home contents with a Home Insurance policy.
Question #3 – My sewage pipes burst and it ruined all my furniture in the living room. What are the items that are insured?
According to Aviva's claims data, the most common reason for home insurance claims is water damage.
A good home insurance plan should provide cover for home contents such as furniture, domestic appliances, PC & laptops in your home, including your renovations.
Question #4 – My neighbour's water pipes burst and it leaked through my ceiling, some furniture was ruined in the process. Do I claim it under their insurance or mine? If they have no home insurance, what should I do?
You can possibly make a claim against their home insurance under personal legal liability cover.
However, if they do not have home insurance, you may want to negotiate for a private settlement or escalate the matter through mediation or by engaging a lawyer to sue for damages.
Alternatively, you may make a claim against your home policy.
Question #5 – My contractor did not do a good job with renovation and cracks are appearing on the wall and floor tiles. Is this claimable under Home Insurance?
The average Singaporean household probably spends tens of thousands of dollars on renovation costs so it's probably worth having the right coverage to cover the contents in your house.
In this case, however, cracked walls arising from poor workmanship would probably be claimed against your contractor's professional indemnity insurance.
Alternatively, you could seek compensation from them for a botched job.
Question #6 – My house was broken into after coming back from a short holiday, are the stolen items covered?
Yes, but the standard market practice is such that your house must not have been left unoccupied for more than 14 days in order for your losses to be covered.
Question #7 – Will Home Insurance cover theft/ damage of my valuables (e.g. art collection, expensive jewellery, etc)? Is there a need to inform the insurance company about these valuables before purchasing the Home Insurance?
You won't actually need to pass your insurer an inventory list of the items in your house in order to purchase home insurance.
Having said that, there are usually sub-limits as to how much an insurer will pay in the event of a claim for certain valuable items.
For example, Aviva's Home Insurance covers up to $35,000, $50,000 and $100,000 for their Home Lite, Home and Home Plus policies respectively.
Question #8 – Can I purchase contents insurance if I am going to rent out my house?
Yes, but it's worth noting that certain risks such as malicious or deliberate damage by tenants are not covered under the policy.
Question #9 – Does home insurance also cover accidental damage of the contents in my house?
No. Home contents insurance usually only covers accidental damage caused by specific events such as fire, theft, flood etc.
This may differ from insurer to insurer – it'd be useful to check with your insurer to ensure you're covered for the scenarios you may be most worried about.
Question #10 – Will I ever need to change my home insurance coverage?
You should review your coverage at least once a year or whenever there's a significant change in your home or its contents.
For example, if you've just built your dream walk-in wardrobe or if you've just kitted out your living room with a home theatre system, you should probably consider reviewing your current policy to ensure your existing tier of coverage is enough to cover the cost of replacing some of your new big-ticket items.
Well, unless you're an art enthusiast and have a collection of paintings worth hundreds of thousands of dollars, then you probably should consider purchasing a different insurance plan altogether for that!
We hope you now have a better idea about home insurance and what it does or doesn't cover.
Apart from building and home contents insurance, you should also consider mortgage insurance! Here's a simple chart to help you differentiate the types of insurance you might need for your home.
1Based on Aviva's Home Lite insurance plan