Mr Alfred Chia BSc, CFP, FChFP, ChFC, SAMP, Affiliate of STEP, IBF Fellow
CEO, SingCapital Pte Ltd
This article is contributed by SingCapital. First published on The Straits Times on 03 April 2022.
You have just found your dream property and have moved in to make it your home sweet home. A home is supposed to be a haven of security and comfort but have you spared a thought on what would happen if things go wrong?
Just consider the following scenarios:
• The family is watching a movie in the living room and there is an explosion in the kitchen because someone has carelessly left the gas on.
• Your home is broken into by burglars and all your watches and jewellery are missing.
• You wake up on Sunday morning to discover that flood waters have seeped into the ground floor of your three-storey detached house after an overnight heavy downpour.
• You are charging an electrical device and the battery suddenly explodes and starts a fire in your home.
Many home owners know that such scenarios are possible, especially the last one, even though many like to believe that it would never happen to them. As a smart home owner, do you choose to ignore the plausible or will you take steps to protect your home and your loved ones? This is the purpose of having a home insurance because it provides the necessary protection for your home, belongings and your family. But before you decide to sign up for a plan, do consider the following points.
Some plans provide for only the basics – you get compensation for damages caused by fires, flood, explosion and riots, civil commotion or strikes (commonly known as “Insured Perils”). Other plans have additional features that provide for theft coverage and the option to purchase an “all risks” coverage to protect you against losses due to accidents at home. For example, while playing in the living room with his friend, your son knocks down your brand new flat-screen TV and the screen is cracked. If you have an all-risks policy, you can claim for compensation as it was an accidental damage.
Most insurance plans provide a one-size-fits-all solution, targeting mainly home owners residing in their property. But what if you are a tenant, renting the property from someone else? Landlords and tenants have different interests and these interests are frequently ignored in a bid to come up with a mass market product. For example, rent protection and property owner liability cover will provide for added peace of mind for the landlord but not the tenant. Tenants should opt for policies that cover their belongings and legal liability should they accidentally damage the landlord’s property. Tenants can also save on premiums if they do without coverage for fixtures and fittings belonging to the landlord which are usually included in most home insurance plans.
Personal and Family Liability Coverage
Imagine your home caught fire due to an electrical device explosion. The fire not only damages your property, but it also spreads to your neighbours’ units. It causes tremendous damage to their units and there are even injuries to the occupants. They can pursue civil liability claims for compensations which will cost you a lot of money. Some policies will cover the personal liabilities and some even extend worldwide cover. While evaluating such policies, do find out if live-in family members and domestic helpers are covered as well.
Many of us are excited when we buy something new, whether it is the newest sound system or an expensive watch. Some people will even make it a point to tell relatives and friends about it. But what most people forget to do is to update their home insurance policy so that these new items are covered as well. If you have any valuable items such as expensive watches and bags, you can possibly get coverage for that, with additional premium. Some policies do contain waiver of penalty or relief for under-insurance and thus, it makes sense to ask about such benefits when you review your policies.
Some plans provide additional coverage such as personal accident coverage for home accidents, expenses for tracing and assessing water seepage or worldwide coverage for personal items. These features are useful for added protection. Look out for features that cater to your interests or lifestyle. This ensures that you do not pay for features you do not need and you get the most out of your insurance policy.
At the end of the day, take time out to review the different plans so that you can make an informed choice. Selecting a plan based on the premium alone is not advisable; you might be exposing yourself to a situation which requires you to pay from your own pocket in exchange for a saving on the premium. It is important to understand details of the policy coverage.
With so many choices, it makes sense to talk to professionals who are familiar with the different types of coverage available to help you select the coverage that best suits your needs.
You may wish to contact SingCapital and craft the most suitable safety net for your dream home.
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