Home Insurance

6 Things You Didn't Know About Your Home Insurance Coverage

It can be easy to get confused by the many things your home insurance claims to cover. However, what is actually covered may leave you surprised. Read on to find out some lesser-known facts about your home insurance policy.

Most Singaporeans know that their home insurance offers fire, renovations, building and contents coverage. However, for every policy there are certain things that you may be surprised to see that are covered—or not covered. Below, we explore some lesser-known coverage options and tips to make the most out of your home insurance policy.

Your Insurer May Pay for Your Hotel Room if You Can't Stay at Home

If your home gets damaged by a fire or any other insured event (lightning, explosion, impact by foreign object, theft, flooding, malicious acts or bursting/overflowing of domestic water tanks), your insurer may offer to pay for temporary relocation. This means that your insurer will pay for your stay at the hotel up to the limit of cover offered. However, there are a couple stipulations to this benefit. First, you have to pay for the accommodation expenses first before filing a claim. Second, your insurer will not pay for non-lodging costs incurred at the hotel for food, beverages, phone calls, laundry or hotel entertainment. Nonetheless, this can be a useful and cost-saving beneift to have since hotel prices in Singapore are one of the most expensive in Asia Pacific, (costing an average of S$240 per night) and housefires, though declining, are still one of the greatest (and most expensive) threats to your home.

This graph shows the average number of house fires occuring per year in Singapore between 2012 and 2016

Your Pets May Be Covered

It is common knowledge that home insurance will cover your family and your contents—however, some insurers even offer coverage for your pets. As pets are becoming more popular in Singapore, with an increase of 32% in just dog registrations alone in the past 10 years, it may be beneficial to know that your home insurance may pay up to S$1,000 as a one-time payment for death or for medical expenses due to an insured accident at home. Since owning a pet in Singapore can cost up to S$20,000 over the course of 10 years, it can be comforting to know that your insurer may offer some financial help if something happens to your furry family member. However, you should know that if someone you know abuses your pet or it gets sick on its own, you will not be able to file a claim against your home insurance policy.

Theft & Break-Ins Are Only Covered If They Were Forced Entry

Unfortunately, if something from your home is stolen or was damaged due to theft, your home insurance won't cover it unless there was a clear evidence of a forceful break-in. This means you won't be covered if your family member or friend stole something from you while you were in your home. The same goes for situations where your domestic worker or renter stole something from you (although there are maid insurance policies that do cover theft by foreign domestic workers, under which you can file a claim). Additionally, your home must not have been unoccupied for more than 14 days around the time of the incident.

This graph shows the annual number of house break-ins and related crimes between 2012 and 2017 in Singapore

Your Personal Accident and Medical Coverage is More Restrictive Than You Think

With most elderly and child-related accidents occuring at home, you'd think that your home insurance coverage will provide flexible options for claiming for personal/family accident or medical expenses. However, your personal accident and medical coverage will only offer cover if you or your family were injured due to an insured event. You will not be able to claim for injuries that occured if your elderly relative or child suffers a fall and requires hospitalisation. Additionally, even if you did suffer an injury from an insured event, your insurance will only pay out only for permanent disablement or death. This means if you suffered severe burns in a fire but were expected to fully recover, you may not be able to file a claim. In these instances, your best bet will be to file a health insurance claim.

Not All Water Damage is Claimable

According to Aviva, the most common home insurance claim was due to water damage. This makes sense because Singapore does have its fair share of flooding and aging housing infrastructure. However, your home insurance will only cover water damage due to flooding as a weather event, or caused by burst water tanks, apparatus and pipes. This means that you will not be covered if the cause of water damage was due to wear and tear of older pipes. Additionally, damages during repairs or cleaning are not covered (for example, if the water damage occurred when you were repairing a faulty pipe, your insurance you will not be able to claim for damages).

As Your Wealth Increases, Your Home Insurance Coverage Should Too

Unless the real estate market crashes or stagnates, your home will usually be an appreciating asset. Additionally, as you get older and progress in your career, your wealth should increase as well. In fact (even though it may not feel like it), Singaporean's household wealth has been increasing since 2002 and is expected to grow 2.3% for the next 5 years. This increase in wealth means that after a certain point, you may want to purchase more expensive items, invest in artwork or undergo renovations.

This graph shows the increase in household wages in Singapore between 2007 and 2017

Following this, if your household contents change drastically, you should consider upgrading your home insurance policy when it comes time to renew. If your current insurer doesn't provide it, other insurers may offer coverage for artwork, valuables, electronics and documents coverage and higher renovation and contents coverage limits. What you should avoid, however, is ignoring dramatic changes to your home as you risk under-insuring. If your insurer penalises you for under-insuring, you may end up getting your claims rejected and paying for your damages out of your own pocket.

Anastassia Evlanova

Anastassia is a Senior Research Analyst at ValueChampion Singapore, evaluating insurance products for consumers based on quantitative and qualitative financial analysis. She holds degrees in Economics and International Business Management and her prior working experience includes work in the capital markets sector. Her analyses surrounding insurance, healthcare, international affairs and personal finance has been featured on AsiaOne, Business Insider, DW, Vice, Her World, Asia Insurance Review, the Australian Institute of International Affairs and more.