Buying a house in itself is already a big-ticket item. As a home is a place where you spend a significant amount of time at, it is understandable that you would want to spruce up the place to your desires. According to Qanvast, the average HDB renovation cost is approximately $53,000. This excludes another estimated $30,000 that is likely to be spent on white goods such as electrical appliances and loose furniture. Having incurred such a large sum of money on renovation and fitting out, you definitely want to ensure that the value is well protected. To illustrate why it is important to purchase home insurance, Heartland Boy will try to dispel come common misconceptions that home-owners have.
A Fire Insurance Covers Only The Structure Of The Building
If you recall Heartland Boy’s HDB key collection article, it is compulsory to purchase a HDB fire insurance before the HDB loan will be approved and the keys issued to you. Since it is mandated by the HDB, most home-owners assume that the fire insurance is comprehensive enough to cover for everything. Add to the fact that it comes from a government statutory board, it also has the unintended effect of lulling home owners into a false sense of security. Unfortunately, this cannot be further away from the truth. The HDB fire insurance by eTiQa is simply a basic fire insurance that covers for damage to the structure of the building and any fixtures and fittings provided by the HDB. A closer look at the coverage details will explain the case.
As Diagram 1 illustrates, HDB fire insurance’s coverage does not extend to the fixtures arising from your own renovation and furniture. In an unfortunate event such as a fire, the insurance will not cover for the cost of your home contents. In other words, the amount that you have spent on renovation and furnishing will go down the drain overnight. Do not be alarmed that it could possibly cost more to re-instate your house to its previous condition. Financial catastrophes like these can set your retirement plans back dramatically as you are forced to dip into your emergency reserves. Therefore, it is important to purchase a home insurance to be protected against such large unforeseen bills.
I Am Not So Unlucky
Another common misconception that a majority of home-owners have is that they won’t be so suay (unlucky) as to have accidents befall their homes. Well, TodayOnline stated that the government has been mulling over mandating the installation of home fire alarms in view of the rising proportion of injuries arising from residential fires over the past decade. This is especially the case as users of Personal Mobility Devices charge their batteries overnight.
Maybe an ageing tree could fall onto your apartment unit and damage your windows and air-condition compressors?
Or how about those flash floods that are happening more frequently than once every fifty years? It has been reported that some of these floods have damaged high-value items such as a prized art collection stored in the houses.
While some home-owners might think that fires or flash floods are isolated incidents, it is actually commonplace for burst water pipes or short circuiting of electrical appliances to take place in a household. It could also come up to a substantial amount to restore the house to its original condition arising from such localized damages.
Penny Wise, Pound Foolish
The thing with insurance is that when you don’t need them, you think that they are unnecessary costs that only add up to your living expenses. However, when you need them the most, you realize that you might not have purchased them in the first place.
Heartland Boy has been to many house warming events whereby proud home-owners would welcome their families and friends to their humble abode. These apartments are often impressively dolled up and will not look out of place in the front covers of home design magazines in Singapore. However, he often shudders at the thought when his question of “Have you purchased a home content insurance?” is often met with a “huh?” Sometimes this could be attributed to ignorance, foolishness or just downright sheer arrogance.
The truth is that a decent home content insurance doesn’t cost a lot. They can be had at less than $100 per annum. In the grand scheme of things, the premiums are cheap and affordable if you look at it over a long-term period- such as until you pass away. Yet, in trying to save the annual premiums on home contents insurance, such home owners could end up being penny wise and pound foolish.
Heartland Boy Purchased Home Insurance
Having demystified these common misconceptions, it should be patently clear by now that a different type of insurance is needed besides the mandatory HDB fire insurance. The HDB fire insurance provided by eTiQa clearly does not meet Heartland Boy’s entire needs. Therefore, he promptly purchased a home content insurance.
The reviews allowed Heartland Boy to decide on a home contents insurance policy that provides sufficient coverage for his renovation, home contents, personal liability and personal accident. Here is a snapshot of some of the insured perils and its definitions.
The entire process was extremely convenient and hassle-free. Most importantly, acceptance into the policy is immediate. This was critical to him as some of the electrical appliances that he had purchased have already arrived before renovation of his BTO is completed. This provides him with peace of mind during the entire renovation process.
The savings that he had used to pay for his home renovation came from his blood, sweat and tears. (figuratively of course) Therefore, Heartland Boy bought a home contents insurance plan to protect himself against any large unforeseen bills. Likewise, Heartland Boy thinks that you would probably want to guard yourself against such unpleasant situations. It’s still not too late to get your Home Contents insurance policy today. This is to ensure that you have complete coverage (structure, renovation, personal belongings) for your cherished home. Don’t let any mishaps (fire, flood, theft) wreck your household finances!