Home Insurance in Singapore: Ultimate Guide for 2020

When it comes to owning a property, there are so many moving parts.

One of them is the home insurance.

That one little aspect that you might have heard before but neglected…

Today, we’re going to cover all there is to know about home insurance in Singapore.

Let’s get started!

But First, What Is Fire Insurance?

To start off, you’ll need to know what is fire insurance first.

Fire insurance basically covers the internal building structures, fittings and fixtures.

It is to protect against the high costs of repair works if a fire were to happen.

Depending on the type of property you own, the scope of coverage may be different.

For HDBs

The HDB Fire insurance is compulsory for those who have an outstanding HDB mortgage loan.

The premiums are very affordable – $7.13 to cover a 5-Room flat for 5 years.

As mentioned, the scope of coverage is limited and generally covers only what HDB has built.

Everything else is not.

For Condominiums

Things are different if you reside in a condo or a private apartment.

If your condo is under a Management Corporation Strata Title (MCST), there is a legal responsible for the management to insure the entire property.

So if the property is damaged, the management can make a claim and reinstate it.

For Landed Properties

For landed properties and apartments without the strata title, it’s optional to buy a fire insurance.

But just because you don’t need to doesn’t mean you shouldn’t.

Mishaps can still happen.

The Difference Between Fire and Home Insurance

The main difference is that if a fire were to happen, and it destroys everything (for example)…

What is usually covered in the fire insurance is the repair works to reinstate the property to its original state (like how it was like before you moved in).

What’s not covered is everything else.

Things such as your beautiful renovations, appliances, personal items, etc, are not covered, and these can amount to a fortune.

And that’s where home insurance or home contents insurance comes in.

Home Insurance Is Also Not Mortgage Insurance

Although both can be closely linked, they’re entirely different.

The home insurance covers the property but the mortgage insurance covers the person paying for the mortgage loan on the property.

The Home Protection Scheme (HPS) for HDB owners and private mortgage insurance (or term plans) help to cover the cost of repaying the home loan if the homeowner is taken out of the picture – when death, total and permanent disability and critical illness happens.

Getting protection to cover yourself is very important as it can be more catastrophic.

The 2 Types of Home Contents Insurance

Not all home insurance are created the same. There are major differences.

1) Insured Peril

Such policies only cover what is specified inside the policy documents.

For example, if it only covers fire, then the insurance company will only pay out the claim if it’s due to fire damage.

Nothing else.

2) All-Risk

These policies are more comprehensive.

Their coverage extend to everything except what’s specifically excluded in the policy.

As such, all-risk policies are usually more pricier than the “Insured Peril” ones.

What Does a Home Insurance Cover?

While the specifics of each policy may be different, there are still common types of coverage amongst the different insurance companies.

1) Fixtures, Fittings and Renovations

The structure of the building is usually covered by the fire insurance.

However, things that you “added on” are not.

If you’ve asked your interior designer and/or contractor for help to renovate your house, those can be covered under a home insurance.

2) Home Contents

The contents in a home can amount to a sum as well.

Think about the time and money spent to choose the perfect furnitures, home appliances, electronics, etc.

If they’re caught in a fire, they can be easily destroyed.

… and you’ll have to start from square one.

It’ll be easier for you if you get a pay out if such a scenario happens.

3) Personal Items

Depending on your plan, you can also be covered for your own personal belongings.

These can include the loss of money, credit cards and important papers.

While there are caps to how much you can claim from each item, it gives greater assurance that you won’t lose everything.

4) Alternative Accommodation Costs

If your home is damaged because of a covered event which made it uninhabitable, this will be essential.

You won’t know how long the repair is going to take and you would still want a comfortable place to live in.

At least you’re still able to find a nice alternative home for your family to tide through this period.

5) Personal Legal Liability

Whether you’re on friendly terms with your neighbours doesn’t matter if you’re the cause of their properties being burned down.

There’s always the guilt.

However, there is more to it.

You may be liable for the damages caused and it can be hefty.

A home insurance can mitigate this risk.

6) Others

While the core items are mentioned, there are still other items that can be insured.

Examples: death of pets, breakage of glass/mirrors, and more.

The 3 Groups of People Who Should Get It

1) Homeowners

It goes to say that if you’re the owner of the home and you’re staying in it, you’ll own everything inside.

Because of this, you have a much greater responsibility and burden if everything goes up in flames.

Getting a home insurance eliminates the heavy financial loss.

2) Landlord

Some of us buy properties to gain rental income.

Although there’s an overlap of being a homeowner and a landlord, they do have different needs.

For example, a landlord will be worried that when a property is damaged, rental income will be lost.

This can be mitigated if there’s a coverage for such an event. Just make sure that particular coverage is included in the policy.

3) Tenant (or Renters)

This depends on whether the rented place came furnished or unfurnished.

If it was furnished, chances are that the landlord has already covered the home (hopefully).

If it was unfurnished, you would likely to have bought your own furnitures and appliances.

These won’t be covered if you don’t have a home insurance.

Finding the Best Home Insurance in Singapore

Home insurance in Singapore is in a very competitive space.

And generally, most insurers provide coverage on the core areas.

As it’s more affordable compared to other forms of insurance, you’ll be fine as long as you select one.

However, you’ll need to pay more attention if you require more specific coverages like when you have pets, renting out apartments, etc.

Abram Lim

With over 7 years of experience in the financial advisory industry, and previous stints in Citibank and UOB, Abram eagerly shares his knowledge by publishing research-backed articles. Learn more about Abram