Insurance is a contract where an individual or an entity is financially protected against losses. Many people get insurances for their health but do you know there are insurances for your home too? There is a myriad of property insurance coverages suited for your needs, depending on whether you are an owner-occupier, landlord or tenant.
Fire insurance is mandatory for homeowners and landlords as long as you purchase your house with the help of bank loans. It is a requirement from the banks and insurance payouts will go to the respective banks you have your mortgage with. This fire insurance is to protect the financial interest of the banks. However, if you have paid off your mortgage loans, you are not obliged to get fire insurance.
Most private apartments such as condos are registered as a Management Corporate Strata Title (MCST) property, which has fire insurance covered for mainly the common areas.
If you bought a house and you are going to live in that house, homeowner insurance is for you. This insurance typically covers 4 main protections:
- Structure of your home (Exterior and interior renovations)
- Personal belongings (Furniture, electronics, clothing, etc.)
- Liability protection (medical and pets’ expenses)
- Additional living expenses (emergency interim accommodations due to insured disasters)
The cost for the homeowner insurance varies, depending on the amount of coverage you are looking for, the size of your house and the insurance company you choose. For instance, a one-bedroom condo cost around $116.90 per year with FWD, with $60,000 and $60,000 insured for renovation and home contents respectively. Also, discounts are usually offered for purchases of insurance for longer terms. For the above example, homeowners have to pay approximately $227.95 for a 2-year insurance coverage.
If you are a landlord, having a landlord insurance is essential in protecting the property itself and covering your losses for the actions and non-actions of your tenants. Aside from the coverage for renovation and homes’ contents, it typically also includes protection for:
- Non-payment by tenant
- Loss of rent due to untenanted home following a suicide or murder
- Loss of rent when your tenants are unable to continue their tenancy due to insured events
- Legal costs for tenancy disputes
Insurance for landlords is usually slightly more expensive than the insurance for owner-occupiers as they require a higher protection for tenant-related risks. For a one-bedroom condo, it costs $129.20 per year with FWD with $60,000 and $60,000 insured for renovation and home contents respectively and $251.95 for 2 years.
If you are a tenant, renter’s insurance, or more commonly known as home contents’ insurance is for you, especially if your rental property is unfurnished. It is recommended to get the renter’s insurance as landlord’s insurance do not cover any of your losses. This insurance covers 3 main protections:
- Personal belongings (furniture, electronics, clothing, etc.)
- Tenant’s liability (accidental damage to property or unintentional injury to someone)
- Post-loss expenses (emergency cash or accommodation if home becomes inhabitable)
The cost for the renter’s insurance varies but it is usually quite affordable. For a condo with $60,000 insured for home contents with Etiqa, it costs approximately $98.41 for a 1-year plan and $280.46 for a 3-year plan.
Scenario 1 – There is a leakage in the house caused by the bursting of water pipes. The leakage resulted in damages of the parquet flooring and his newly bought sofa. The landlord’s insurance will cover the cost for the repairment of the parquet flooring while the tenant’s insurance will cover the cost of the sofa.
Scenario 2 – The tenant left the tap on, which resulted in the water overflowing and damaging the parquet flooring and his sofa. In this case, he would not be able to claim under the tenant’s insurance policy as losses and damages caused by human factors are not covered.
Which insurance companies should I get my home insurance from?
There are a few reputable insurance companies that you can get your homes insurance from, such as Income, Etiqa, Aviva, AXA and FWD. Different insurance companies may offer different terms, so it is important to read the policy wording carefully and clarify any doubts with them before you proceed to make the payment.
Is it mandatory to get a home insurance?
No, it is not. Ultimately, it’s up to you to decide if you want to spend extra, but most home insurances are quite affordable. Since you invested on a property, why not top up a little more, at least with a basic plan, just to save yourself from worrying about the costs when something unexpected do happen?