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03 Jan 2017

No thanks, I have fire insurance


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If you believe you have a fool-proof plan with fire insurance, it's time you put out that thought! Most fire insurance offers only basic protection for the building structure and permanent fixtures and fittings. 

Add to that, there are fire insurance policies out there that serve a different purpose. Your home may not be as protected as you think they are under these policies. 

HDB Fire Insurance
If you have borrowed a HDB loan from the Housing & Development Board, you will be required to purchase the HDB Fire Insurance with their appointed insurer. This policy covers the structure of the flat including the four walls and fixture and fittings provided by HDB including Design, Build and Sell Scheme flats bought from the developers. This policy gives basic coverage and does not contain home contents cover. 

Private Residential Property (with MCST)
If your property is a strata-titled development, it is mandatory for your Management Corporation to undertake a master fire insurance policy. The Management Corporation can make a claim on the policy following a property damage and use the insurance proceeds to reinstate the premises and the common area to its original condition. Similarly, this master fire insurance policy does not cover your household contents, personal belongings or any improvements and renovation works that you have made to your apartment. 

Mortgage Interest Policy (MIP)
If your property is mortgaged, the bank may require you to take up a fire insurance policy on the outstanding loan. Commonly known as Mortgagee Interest Policy, it is not to be mistaken as a personal property fire insurance. Rather, it is to insure the financial interest of the bank and allows the bank to make a claim if the borrower is unable to service the loan following a property damage. Once the borrower has redeemed his mortgage loan, the Mortgagee Interest Policy will be cancelled. 

As a guide, check your home insurance against some of these essential items: 

1. Property coverage

- Building structure

- Fixtures & fittings

- Household contents

- Renovations

2. Liability coverage

- Bodily injury

- Third party loss/ damage

These benefit covers are largely featured under MSIG's Enhanced HomePlus policy, with the flexibility given to you to customise the sum insured for the building structure. Premiums start at $118.77 (with GST) per year for a standard plan. 

For more information on fire insurance, visit the General Insurance Association website at www.gia.org.sg.