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Choosing a home insurance plan in Singapore goes beyond comparing premiums. Here’s everything to know about how home insurance works, and what to look out for when choosing the best plan for your property.
For the vast majority, our homes are among our most precious assets, representing one of the most substantial investments in life. Also, it contains virtually everything we own, and should a serious incident such as a fire or a break-in occur, the consequences could be devastating.
Despite our best efforts, accidents can still occur, often outside of our control. Having a home insurance plan in place can go a long way in shielding your family from the financial fallout of a house fire, burst pipes, or the aftermath of a robbery.
Homeowners in Singapore have a large selection of home insurance plans to choose from, ranging from basic plans that protect against common hazards, to customisable policies that let you choose your level of coverage. There are also variants aimed towards the needs of landlords and tenants.
Let’s take a deeper look at home insurance in Singapore and how to choose the best plan for your property.
Home insurance policies cover your residential property against risks and hazards that could occur during the course of everyday life.
Some of these include fires due to cooking mishaps, carelessness or electrical faults. For the first half of 2023, there was an increase in house fires caused by rechargeable batteries used in personal mobility devices.
The water pipes that run through our homes could also burst or become clogged, causing backflow and flooding inside the property. The increasing incidences of flash floods due to climate change also put more homes located in flood-prone areas at risk of damage.
As safe as Singapore is, home burglaries still occur. Most recently, four landed homes were broken into on Polling Day in September!
Given the high cost of residential properties in Singapore, and the five- to six-figure sums we spend on renovating our homes, it’s crucial to choose the proper home insurance plan.
Here are some common options, and a brief explanation of what they are for.
● Fire insurance. This type of policy only covers the cost of restoring the building structure and its original fittings in the event of a fire. It does not cover the cost of renovation, furniture and appliances, and personal belongings.
● Home contents insurance. This covers against loss or damage of belongings stored at home. Typically used to protect high value items, such as antiques, jewellery and luxury goods.
● Renters’ insurance. A type of policy that protects renters against loss of accommodations should their place of rental become unfit to live in.
● Landlords’ insurance. Similar to renters’ insurance, landlords’ insurance mainly protects against loss of rental income due to issues with the property. Coverage for repairs and restoration is usually included.
● Home insurance. This is the type of home insurance plan that most homeowners should obtain. It provides cover for your property, renovation works, furnishings and appliances, and personal items against loss or damage due to fires, leaks and floods, and break-ins. The best home insurance plans also offer additional benefits such as home emergency repairs and personal accidents at home.
Before choosing a home insurance plan, you’ll first need to evaluate the cost of rebuilding or repairing your property, as well as the cost of your renovations, furnishings and fixtures. You should strive to be accurate here, as you will need to match your home insurance coverage to the value of your property and contents to avoid underinsurance.
Here’s what that means. Let’s say the cost of your home renovations and fixtures come up to around S$60,000. Seeking to lower your premiums, you purchase a plan for S$30,000 coverage; this means you are underinsured by S$30,000 or 50%.
When assessing your claim, should your insurer find you in breach of underinsurance, your benefits will be reduced proportionately. That means instead of receiving S$30,000 in payouts, you will only receive half of that, making a bad situation even worse.
Underinsurance is meant to prevent insurance fraud, and is typically only enforced when a substantial gap is present. Still, it’s good to be aware of this possibility and ensure you choose adequate coverage for your property.
For HDB homeowners, your mandatory fire insurance policy will cover the cost of restoring the unit and its original fixtures. Hence, you need only account for the cost of your renovation work, furniture and appliances.
For landed properties, you will need to insure not only your home contents, but also your property building. Thus, you should include the estimated cost of rebuilding your property, including professional fees involved.
As for personal belongings such as clothes, accessories, laptop, cameras, etc., note the sub-limits in your home insurance plan. For luxury goods and high-end items like jewellery and collectibles, consider using a standalone home contents plan.
Don’t forget to consider the following factors when choosing a home insurance plan.
● Location. If your property is in a flood-prone area, ensure that your policy provides sufficient coverage against floods and water damage. Singtel Home Protect includes up to S$40,000 coverage against floods, as well as fires and break-ins.
● Are you renting? If you’re a tenant, you may prioritise flexibility. Singtel Home Protect Flexi is a monthly home insurance plan with no contract, so you won’t be tied down by long insurance terms.
● Type of dwelling. Some home insurance plans cost more for landed or private properties. Singtel Home Protect does not charge higher premiums based on property type, providing a fair option for all homeowners.
Home insurance plans come in a variety of choices, which can be difficult to navigate for those unfamiliar. Here are the basic features homeowners should focus on when choosing a plan.
● Building and structure. This benefit covers the cost of rebuilding, repairing and restoring your property building and structure to its original state. This includes the building’s exteriors or facade, and may include internal fittings that came with the property.
● Home contents. This benefit covers the interior of your home, and what’s contained within. Typically, this includes renovations, furniture and appliances. Personal items are also covered, but often with sub-limits.
● Liability to third parties. As a homeowner, you may be liable for losses or injuries suffered by guests, tenants or neighbours. Third party liability benefits will cover claims brought against you.
● Accidents at home. Some home insurance plans offer personal accident benefits for death or disability as a result of an accident occurring at home. This may be included by default, or available as a paid add-on.
● Home assistance services. This benefit offsets the cost of hiring a technician or plumber to fix blown fuses, leaking pipes, aircon breakdown and other home incidents.
● Other paid add-ons. These are optional benefits that you add to your policy for an extra cost, and may include coverage for bicycles and sports equipment; cyber fraud coverage; loss of cash and fraudulent use of bank cards, etc.
When choosing between home insurance policies from different providers, it’s worth adopting a holistic approach.
Don’t just focus only on premiums, as a plan with a low premium may have a high deductible, which means higher out-of-pocket costs.
It pays to work with an insurer with a good reputation for customer service and a smooth claims process, as that will save you from added frustration. Another tip is to check online reviews such as Google or Seedly to get an idea of what others are saying.
As with all insurance policies, it’s important to pay attention to the fine print that comes with your home insurance plan. Here are some pertinent items to look out for.
● Exclusions. It is common for home insurance plans to contain exclusions, which are specific scenarios under which your benefits do not apply. For example, your insurer may not cover losses and damages due to a break-in if your property had been left vacant for a significant period.
● Definitions. On a related note, you should also check how the policy defines certain terms and words to understand thoroughly the extent and limitations of your home insurance plan. For example, the term “emergency” may only include incidents of a certain severity, and not the conventional definition of an urgent situation with potentially serious consequences.
● Sub-limits for claims. A sub-limit is the maximum amount you will be awarded for a specific loss under an overarching category. For example, a policy may provide up to S$50,000 in home renovations cover, with a sub-limit of S$2,000 for broken glass. This means you should expect a maximum payout of S$2,000 for your stained glass wall fixture.
● Policy limits. You may not always be awarded the full policy limit. It depends on how your insurer assesses your claims, and you may receive a lower amount. Note that there may also be an overall policy limit in place. This is the maximum amount your insurer will pay in total for any one claim, even if the sum of the component claims exceeds this limit.
Q1. Is home insurance legally required in Singapore?
No, home insurance is optional and not required by law. However, fire insurance is mandatory in many instances, including when applying for a mortgage from a bank, or when using the HDB Home Loan to purchase your flat. The management strata of private condominiums typically mandate fire insurance for residents.
Notwithstanding the lack of legal requirement, it is advisable for all homeowners and renters to protect themselves with an appropriate home insurance plan.
Q2. What’s the difference between home contents insurance and fire insurance?
Home contents insurance covers the contents of your home, including renovations, furniture and appliances, and to an extent, your personal belongings. You are covered for damages and losses arising from common hazards such as fires, smoke damage, floods and leaks, water damage and home break-ins.
Fire insurance only covers the building structure, its exteriors and facade, and the original fixtures that the building came with. Home contents and personal belongings are not covered. Also, only damage or loss caused by fire is covered, and not other causes like flash floods or burglary.
Having both home insurance and fire insurance will allow homeowners to be more adequately protected.
Q3. How can I estimate the value of my home contents?
Refer to your total renovation bill for an idea of how much coverage you need for your home contents. Don’t forget to include the costs of furnishing and appliances that you added along the way.
You should also add the estimated value of your personal belongings, but note the sub-limits for certain items such as laptops and computers, and jewellery.
Q4. Will home insurance cover all natural disasters in Singapore?
Home insurance typically covers naturally occurring incidents such as flash floods during monsoon season. As Singapore is a lightning-prone country, home insurance plans also cover damage from lightning strikes, although exceptions may be in place.
Coverage terms for weather and other naturally occurring events can vary between providers, so be sure to check the policy documents.
Q5. Can I transfer my home insurance if I move to a new house?
You may be able to request for your home insurance plan to be transferred to your new home if the latter has a similar coverage and risk profile.
If your insurer declines to transfer, you will have to cancel your existing plan and apply for a new plan for your new home. You may be able to obtain a partial refund if there is significant duration remaining on your old plan.
Alternatively, sign up for a contract-free home insurance plan like Singtel Home Protect Flexi for which premiums are paid monthly, instead of all at once.
If you’ve made it all the way here, hopefully you understand why home insurance is necessary for all homeowners. The right home insurance plan will protect you in an emergency, giving you the resources to restore your home as quickly as possible.
Home insurance plans can also protect your family in other ways with personal accident benefits, and third party liability cover, while providing useful features like home assistance services.
The importance of having the right home insurance plan cannot be overstated. For true peace of mind, all homeowners should review their home coverage needs, and act immediately to close any protection gaps that may be found.
Safeguard your home and the people in it with Singtel Home Protect.