Why is disaster planning important?

While Singapore is mostly safe from natural disasters, house fires and flooding still occur. Recently, the Public Utilities Board (PUB) issued numerous flood warnings as Singapore experienced torrential rain across the island. Due to climate change effects, low-lying cities like Singapore may see a rising occurrence of this in the future. There are also more mundane issues that cause flooding, such as burst pipes - but the damage inflicted may be just as costly, and also render your home uninhabitable for a time.

House fires are also a risk. In the first half of 2023, SCDF responded to 967 fires, of which 493 occurred in homes. While cooking activities were the most common cause, even faulty appliances such as air-conditioners have been known to cause major house fires. 

Disaster preparedness and insurance is about more than just rebuilding

All homes in Singapore have mandatory fire insurance; but this policy only covers the cost of rebuilding the home. Several other issues need to be addressed, such as:

●      Cost of debris clearance - After a disaster, there is usually debris such as fallen masonry or destroyed furniture. The homeowner bears the cost of clearing and removing this debris.

●      Loss of items in the home - Furniture, appliances, and other items like jewellery or cash are not typically covered by basic fire insurance. Besides replacing these items, your home is likely in need of another round of renovations, after a major disaster.

●      Need for temporary accommodation - Depending on the extent of the disaster, your home may be uninhabitable for a long period. It may take anywhere from weeks to months to restore your home, and complete new renovations. During this time, you may need to pay to rent a temporary home, as well as pay for storage of your surviving items.

●      Injuries arising from the disaster - Health and life insurance are instrumental in helping with these; but it’s better to also have some form of personal accident coverage to handle co-payment. Some home contents insurance also comes with personal accident plans, for this reason. 

Above all, remember that the bill for disasters is on top of existing mortgage payments. 

While some banks may allow you to appeal, homeowners are generally expected to keep up with mortgage repayments, even if their home is not currently inhabitable. The stress of continuing to pay for the mortgage, while also paying for rent and a new round of renovations, can take both an emotional and financial toll.

So even if disasters are rare in Singapore, the financial damage is so significant, it’s best to remain protected. 

How to be prepared for disasters

A key element is to be properly insured. Besides having fire insurance, you should have home contents insurance (which covers the cost of items in the house), as well as mortgage insurance (which pays off the remaining mortgage, in the off chance the borrower or co-borrowers pass on, or are permanently disabled).

Besides having insurance, there are few steps you can take to minimise the risks:

●      Ensure sufficient coverage for household items: home contents insurance is essential to cover the replacement costs of valuable items that may be lost or damaged in a disaster. Documenting valuables with photos and keeping receipts can streamline the claims process.

●      Have a disaster preparedness kit: Prepare a kit that includes essentials such as first aid supplies, medications, a flashlight with spare batteries, and emergency contact information. Consider including items like bottled water and toiletries for temporary accommodation.

●      Practice disaster preparedness strategies: Ensure all family members are aware of emergency procedures, including how to contact emergency services like SCDF (995). Plan for pets and designate a specific person responsible for their safety during emergencies.

Expediting the claims process and recovery

The quickest way to process your claims is to have the right documentation. Keep secure digital records of your key items and receipts (physical documents may be destroyed in a disaster). This will help to speed up your claims process.

If you have a financial advisor who handles your insurance, they should be the first person to contact - you can also call them right after you’re safe, to determine your next course of action. You may need to take photographs of the damage in the aftermath.

During the subsequent reconstruction, always have contractors send you itemised billing. These invoices and receipts may sometimes be required by your insurer; and the longer you take to provide them, the more delayed your payouts may become.

While disasters are infrequent in Singapore, climate change and unforeseen accidents underscore the need for proactive disaster preparedness. Recent incidents like the fire at a terraced house near Katong Shopping Centre and the blaze in a Whampoa Housing Board flat further highlight the importance of being prepared. Singtel Home Protect offers comprehensive coverage beyond basic fire insurance, including coverage for loss or damage of household contents,personal liability, and personal accident coverage.

By investing in adequate insurance coverage and preparing for emergencies, homeowners can safeguard against the unexpected, ensuring financial stability and peace of mind in the face of adversity.

Attain peace of mind knowing you're well-covered with Singtel Home Protect and enjoy up to S$80,000 in combined coverage for loss of home contents and renovation costs with every plan purchase!

Check out singtel.com/homeprotect for our latest promotions.

Terms and conditions apply. Protected up to specified limits by SDIC. Singtel Home Protect is underwritten by Great Eastern General Insurance Limited.