| Q1: |
What
are the types of home insurance policies available for private properties? |
|
There are two main types of policies:
a standard fire policy that covers losses caused by fire, lightning
and explosion; and a home insurance policy that covers destruction to
a building, home contents and any renovations carried out.
|
| Q2: |
Is
it compulsory for me to take out an insurance policy for my home |
|
If you are taking out a mortgage with
a bank, then you must have the fire insurance policy for your home.
Some banks are offering this policy free for the first year if you take
out a mortgage with them.
|
| Q3: |
What
do the fire insurance policies cover? |
|
They cover damages caused by fire, explosions
and lightning.
|
| Q4: |
What
are the items covered by the home insurance policy? |
|
In addition to the damages caused by
fire, explosions and lightening, the home insurance policy also covers
against fire, flood, burglary, vandalism and damage by vehicles, aircraft
and other aerial devices.
|
| Q5:
|
How
do I know which policy to buy? |
|
The decision to buy an insurance
policy for your home is similar to buying a life insurance policy. You
have to consider your budget, and your exposure to risks in your daily
activities. If your estate is prone to vandalism, burglary then you
should include these items as contents to insure against.
|
| Q6: |
What
should I bear in mind when evaluating the various policy options offered
to me? |
|
It would be useful to consider:
1) Items covered: Does the policy
cover personal accident and liability, loss or damage
to valuables outside the home premises, in addition to the
building, renovation and home contents.
2) First loss or average clause:
Does the policy cover the full or only a percentage of the loss
if you have under-insured your property?
3) Definition of terms: How are
the risks defined in the policy? This is because different
insurance companies define risks differently would pay different amounts
in the event of a claim.
4) Excess clause: There is
a minimum amount you must bear for yourself for every loss except
in the event of fire. As the amount can be from $50 to $200 for each
item, it would be advisable for you clarify
with your insurance agent.
|
| Q7: |
What
do I need to consider than deciding the amount to insure my home? |
|
You should use the potential cost of
reconstructing your home as a guideline. The cost of reconstruction
should include the cost for renovations and the home contents. However,
do bear in mind that the less you insure, the less you can claim if
a mishap occurs.
|
| Q8: |
Is
it better for me to over-insure or under-insure? |
|
Generally, it would be better to over-insure
than under-insure. This is because some insurance companies penalize
owners for under-insuring. Moreover, it makes sense to over-insure by
about 5-20% of the potential costs reconstruction as one tends to add
new the contents to a home.
|
| Q9: |
Do
I have to review my policies once I have bought them? |
|
Yes. You should try to review the policies
annually to accommodate any changes to the contents in your home, or
renovations to the property.
|
| Q10: |
What
is the Average Clause? |
| It is a Clause
that states that owners have to fully declare the total value of the home
contents and building to be paid the full loss in the event of a claim.
If not, only a percentage of the loss would be paid. |
| Q11: |
What
are First Loss policies? |
|
They are policies that owners don't have
to fully declare the total value of the contents and building but they
would be paid for risks such as fire, theft, busting of pipes etc..
|
| Q12: |
How
do I go about making claims for my home insurance? |
|
To make a claim, you have to provide
the following documents:
a) as a police report in the event
of a break-in;
b)
receipts if items of a certain value are lost or damaged, and
c)
invoices of renovations done on the property
|
