Mrs. Chan’s window was damaged by strong wind during a typhoon signal no. 8. Mrs. Chan is the property owner and purchased fire insurance when she applied for her mortgage loan, so she submitted a claim to the insurer. However, the insurer denied her claim because the damaged window was not covered by her fire insurance policy as it was not an original fixture provided by the property developer and could not be classified as part of the “building structure” under the fire insurance policy. It turned out that Mrs. Chan had replaced the window with a new one when she renovated her flat two years earlier, so the window was considered to be an “interior decoration”. Mrs. Chan had not purchased any home insurance, so the cost of repairing the window was not covered by any insurance.
Reminder:
Fire and home insurance complement each other. Fire insurance covers the “building structure” , while home insurance covers “interior decoration and home contents”. Policyholders are recommended to purchase both types of insurance at the same time, if needed. Nowadays, most home insurance policies cover “building structure” or include it as an optional benefit.
The owner, Mr. Chan, and his family travelled to Canada to visit his grandmother for two months. When he returned to Hong Kong after the long vacation, he discovered that his flat had been burgled when he was away, and several luxury watches and handbags had been stolen. Mr. Chan had purchased home insurance, so he made a claim to the insurer for his losses. His claim was denied by the insurer on the ground that his flat had been left unoccupied for more than 30 consecutive days.
Reminder:
“Unoccupancy” is a common exclusion. Generally, insurers may deny a claim for losses if an insured property is left unoccupied and vacant (e.g. the policyholder is away from home for a long period of time or a property is left unoccupied for renovation) more than 30 consecutive days.
The number of days of the unoccupancy period is subject to the terms of the specific policy. Some home insurance policies state that an insured property will continue be covered in the event of unoccupancy for a period of time only if the policyholder informs the insurer and obtains prior consent. It is assumed that the extent of loss or damage in the event of an accident will be minimised if a home is occupied. Hence, the policyholder must notify the insurer about the unoccupancy beforehand and the reason for travelling away from home or leaving the home vacant for interior decoration works, and so forth, and check with the insurer whether there is any adjustment to the premium and what the details of the protection are.
Mrs. Lee and her five-year-old son went shopping in a department store, and her son accidentally knocked a crystal decoration onto the floor, causing it to break into pieces. The shop demanded that Mrs. Lee pay for the broken crystal. Mrs. Lee believed the accident was her fault because she had not paid close enough attention to her child, so she paid for the broken crystal at the full retail price, hoping to settle the incident and leave the store as soon as she could. Later, Mrs. Lee found that her home insurance policy covered third-party liability, so she made her claim to her insurer. However, the insurer denied her claim because Mrs. Lee had violated the claim procedure stipulated in the policy.
Reminder:
In any case involving the loss of, or damage to, a third-party property, the policyholder should not make any settlement agreement with, or admit liability to, the third party before obtaining the consent of the insurer. The policyholder should first report the incident to the police to confirm that the accident occurred, and then inform the insurer immediately. If possible, the policyholder should take photos or a video of the damage for a record, if possible. Also, the policyholder should submit the claim application to the insurer before the claim submission deadline for processing, and the insurer will determine who is responsible for the claim.
The above fictional cases are for reference only. For the coverage, benefit limits and premium levels of a specific home insurance plan, please refer to the relevant policy terms.