Personal Fire Insurance

In Year 2014, there are a total of 4,724 reported cases of fire.
2,888 are fires in both public & private residential premises (Source: SCDF – www.scdf.gov.sg)

Why Do I Need Fire Insurance?

Fire insurance makes good sense.
Your property is a big investment, buying a fire insurance policy brings you peace of mind as it covers you for losses or damages resulting from a fire.
The contents of your home can also be insured.

What Does Fire Insurance for Residential Buildings Cover?

Household insurance comes in many forms with varying coverages, terms and conditions.

Fire insurance is one of the more basic protections available to an owner of a property, covering the building and/or its contents.
In the case of fire insurance on the building (not including its contents) of a residential property, it generally covers the building structure, the permanent fixtures and fittings such as built-in cabinets, baths, toilets, air-conditioning units, fixed carpet, parquet flooring and other immovable decorations or improvements.
It may also extend to cover outbuildings such as garages, covered porch and perimeter walls. However foundations and swimming pools are normally not covered under fire insurance for buildings.
Buying a property is a major decision and probably the biggest investment for most.
Naturally you would want to protect your investment from unforeseen circumstances such as fire.

What Are The Risks Insured Against?

Most fire insurance for buildings provide cover against damages caused to the building by:

  • Fire, Lightning, Explosion
  • Bursting or Overflowing of Water Tanks
  • Theft or Burglary
  • Malicious Damage
  • Riot & Strike
  • Earthquake, Wind and Storm, Flooding

Depending on the insurers, other perils such as subsidence and landslip due to windstorm and flood may also be included.

Is Fire Insurance Compulsory?

Fire insurance is not compulsory.

However, if the property is mortgaged, the mortgagee will require you to have a fire insurance policy on the outstanding loan amount.
However, if the property is mortgaged to a bank or financial institution, the bank or financial institution will require you to have a fire insurance policy on the outstanding amount.
This policy is commonly referred to as the Mortgagee Interest Policy (MIP).

What Other Risks are Insured Against?

  • Public Liability
  • Personal Accident
  • Medical Expenses
  • Loss of Rent
  • Removal of Debris
  • Replacement of Locks & Keys

What is Mortgagee Interest Policy (MIP)?

If your property is mortgaged to a bank, you are required to take up a Mortgagee Interest Policy (MIP).

This is because the financial interest of the bank is not covered by the policy arranged by the Management Corporation.
Should the mortgaged unit be damaged by fire and a claim from the policy arranged by the Management Corporation fails,
the MIP will protect the bank’s financial interest.
If there is a failure to service the loan as a result of the damage to the mortgaged unit, the bank can make a claim on the MIP.

There is no double insurance involved as the policy arranged by the Management Corporation protects the interest of the
homeowner and the MIP protects the interest of the bank.

Types of Policies Available in the Market

Basically there are 3 types of residential categories:

  • HDB Apartments
  • Private Apartments / Condominiums
  • Landed Residential Properties

Property Insurance for HDB Flats?

  • If you are the owner of a HDB apartment, you are responsible for the well being of the property. The Housing Development Board has a competitively priced fire insurance scheme for HDB flats. It is important to note that any improvements you make to the property may not be covered and you may wish to buy additional or separate fire insurance coverage.
  • HDB is responsible for providing cover for fire damage to common areas. If you have taken a mortgage loan from HDB, it is compulsory to take up HDB Basic Fire Insurance to cover the building structure and standard fixture & fittings provided by HDB against fire and other perils. Excludes the common areas, renovations & improvements made to the HDB flat and all household contents provided by HDB.
  • If your flat is mortgaged to a bank as security for bank loan,  the bank will normally require you to purchase an insurance coverage for the property known as Mortgagee Interest Policy (MIP), that may not cover damage to renovations or contents.

Property Insurance for Private Apartments?

  • For private apartment home owners, it is likely that the apartment block has been registered as a Management Corporation Strata Title (MCST) property.
  • Management Corporation (MC) will insure the building and the common property against structural damage caused by fire.
  • MC’s policy cover will restore the building structure to its pre-damage condition.
  • Structure of a building: Common areas, pillars, columns, party walls, windows, external doors, floors, ceiling and roof excludes any improvements/renovations such as flooring or built in cabinets.
  • If your property is mortgaged to the bank as security for bank loan, the bank will normally require you to purchase an insurance coverage for the property known as Mortgagee Interest Policy (MIP).

Property Insurance for Landed Residential Properties

Landed property owners and apartment owners without strata title are able to exercise their choice if they wish to purchase fire insurance for their property.

Common Exclusions For Fire Insurance

  • Loss or damage caused by termites, cockroaches, mice, or rats infestation to your home.
  • Any accident, loss, destruction, damage or legal liability directly or indirectly caused or contributed by or arising from nuclear weapon materials.
  • Loss of cash, currency notes, deeds, bonds, bills of exchange, cheque, securities for Money, stamps, manuscripts, drawings, models etc.
  • Loss or damage caused by acts of terrorism.
  • Loss or damage or injury arising from or contributed to by any
  • dishonest, fraudulent, criminal, malicious or willful act or omission.

Can I Insure The Contents Of My Home?

The contents of your home, including furniture, carpet, TV, computers, books, lamps, ornaments, appliances, kitchenware and personal effects can be insured as well.
Often, a contents insurance policy is issued separately from your fire insurance policy, although some insurers issue a combined policy

pdf Your Guide To Fire Insurance – Click Here to View