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Tuesday, February 28, 2012

Home Insurance

Home is where the heart is. But are you adequately prepared if something unfortunate happens to what may be the biggest investment in your life? Earning power has increased tremendously with economic progress and with this newfound wealth, may have clamoured for a better life. And where better to begin than at one's home where one would spend a major portion of one's life.

Million-dollar condominiums and high-grade renovations costing hundreds of thousands are a common sight nowadays. Thus it is not surprising that your home may be the biggest investment in your life. But have you paused to think what would happen if your home for some reason were destroyed? Many in Singapore have not bothered to insure their property despite the increasing awareness of the availability of such products. Even though the odds are low for any castastrophe, one should not be lulled into complacency as unpleasant things could still happen. Thus one should not tempt fate especially when premiums in Singapore are very competitive and the cost of peace of mind is low - insuring a five-room HDB flat against major disasters and theft costs only about S$100 per annum. 

Home insurance in Singapore is available in two forms, namely comprehensive and named perils insurance policies. Comprehensive insurance covers every disaster except for those named in the policy. What is covered under such policies includes the building as well as the fixtures, fitting as and improvements. Buying such policies will ensure that should any of a long list of disasters strikes, you will be adequately prepared for it. This list includes fire, lightning, explosion, burst pipes, hurricanes, riots, accidental breakage of fixed glass, floods, and theft by forcible entry.
 

In case of named perils policies, they cover only specific causes of damage and are popular with property owners who are especially exposed to certain disasters. It is estimated that several home fires occur a day in Singapore. Not many buy home insurance as they do not subscribe to Murphy's Law - what can happen will happen. But they must be reminded that the wise do not leave everything to fate.
 

Home insurance policies pay up to the sum assured for the loss or damage to the insured's home. Most policies have built in fringe benefits, like paying for any alternative accommodation whilst the damaged property is reconstructed or repaired. It can cost quite a bomb to stay in hotels or rented apartments, thus this benefit can come in quite handy. Another example is capital additions, which could cover the renovations, alterations and improvements to the insured's home.

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