Understanding Home Insurance

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What is home insurance?

Taking out a home insurance policy allows policyholders to shift responsibility to an insurer for any expenses arising from the loss of household possessions, including appliances, furniture, collectibles and jewellery, caused by accidents such as theft, typhoons, flooding and fire. Home insurance also provides third-party liability protection for policyholders and household members, and even employer’s liability for a domestic helper.

Who should buy home insurance?

Both property owners and tenants can buy home insurance according to their personal needs. It covers the loss of the possessions of policyholders and household members in an insured property and their liability to third parties. If a property owner buys a home insurane policy for an owner-occupied property, the policy covers any loss of the owner's household possessions. If the owner rents out the insured property, the policy protects the owner, but does not cover any loss of the tenant’s household possessions and liability to third parties in the event of an accident. Hence, tenants are recommended to take out a home insurance policy, as it covers the loss of household possessions and third-party liability for policyholders and their household members.

If a property owner buys a home insurance policy for an owner-occupied property, the policy covers any loss of the owner’s household possessions. If the owner rents out the insured property, the policy protects the owner, but does not cover any loss of the tenant’s household possessions and liability to third parties in the event of an accident. Hence, tenants are recommended to take out a home insurance policy, as it covers the loss of household possessions and third-party liability for policyholders and their household members.

What factors determine home insurance premiums?

In general, the home insurance premium is determined by the gross floor area of a residential flat and building age. The larger the gross floor area, the higher the premium. The older the building age (e.g. 35 years or above), the higher chance the premium will be adjusted by the insurer. Factors such as property type and the inclusion of a domestic helper also affect the premium level. For example, village houses, detached houses, houses on a low floor, or homes with domestic helpers are of higher risk, so insurers may increase the premium or impose additional charges to cover the insured property.

What is the difference between home insurance and fire insurance?

Fire insurance is commonly known as “building insurance”. Its coverage is not the same as home insurance. The combination of the two provides more comprehensive protection to policyholders.

	Home insurance	Fire insurance （commonly known as “building insurance”）
Policyholder	The owner and tenant can take out separate policies.	In general, banks will require the owner to arrange fire insurance to fulfil the approval requirements of a mortgage loan application; the tenant is not required to purchase fire insurance.
Coverage	Home contents Mainly protects against loss or damage to home contents in the event of accidents such as fire, flooding, typhoon and theft, etc.	Buildings Fire insurance covers the replacement, repair or rebuilding cost for damage to the building structure (e.g. floors, ceilings, doors, windows and walls) of a property caused by a fire. Nowadays, most insurers extend the coverage to damage from other accidents, such as lightning, explosions, flooding and typhoons. Fire insurance does not cover loss of, or damage to, home contents.
Example	Taking a fire accident as an example, fire insurance covers damage to the building structure of a property, such as walls and ceilings, while home insurance covers the loss of home contents in the property (e.g. furniture and clothing) resulting from a fire.

The above information is for reference only. For the coverage, benefit limit and premium levels of a specific home insurance plan, please refer to the relevant policy terms.

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Other useful information

• Common coverage
• General exclusions
• Points to note when buying insurance and making claims
• Common cases
• Myths around home insurance
• Publicity and education materials