You may have heard of instances of fire breaking out in houses, shops, buildings etc in the newspapers, media channels, or even from your family and friends. Just recently, a fire had robbed a family of a precious family member living in Bedok as well as the livelihoods of many at Telok Blangah.
Fire accidents are sudden and destructive; They could easily destroy buildings, and their contents, and could easily bring your life to a halt. This is why it is prudent to buy insurance to protect your home in the event of unforeseen circumstances.
The Housing & Development Board (HDB) has made it mandatory for those who live in public housing to purchase the HDB Fire Insurance Scheme. This may ring a bell to current HDB owners or those who are currently sourcing for an HDB flat.
But what exactly is this HDB Fire Insurance Scheme? What does it cover and what does it entail? Read on to find out everything you should know about the HDB Fire Insurance, and whether it’s enough for your needs.
The current appointed insurer of the HDB Fire Insurance Scheme is FWD Singapore Pte. Ltd and the insurance is valid for a period of five years, with the renewal done every five years.
Till Aug 15 2024, the five year premiums (inclusive of seven per cent GST) are as follows:
| Flat type | Five-year premium | Sum insured |
|---|---|---|
| one-room | $1.62 | $29,000 |
| two-room/ two-room Flexi | $2.71 | $48,700 |
| three-room | $4.87 | $60,400 |
| four-room/ S1 | $5.94 | $82,000 |
| five-room/ S2/ three-Generation | $7.13 | $97,300 |
| Executive/ Multi-Generation | $8.10 | $106,200 |
| Studio Apartment (Type A/ B) | $2.71 | $48,700 |
Every HDB flat purchase from HDB requires a mandatory fire insurance purchase from the appointed insurer. You would most likely have made the purchase when signing up for your HDB loan. What you need to take of, however, is the renewal of the HDB fire insurance after expiry.
Fortunately, the renewal can be done online via FWD’s website. Alternatively, you could do it through any AXS kiosk or simply book an appointment and meet up with an FWD representative at their office.
HDB Fire Insurance Scheme only provides coverage for the bare minimum.
| Coverage (HDB fire insurance scheme) |
|---|
| Reinstating damaged internal structures, fixtures such as pipes and electrical wiring |
| Areas built and provided by HDB |
Simply put, if it was not there when you first picked up the keys to your new HDB flat, then it is not insured by the HDB Fire Insurance Scheme.
This means that in the event of a fire, you would not need to pay to fix the damages on the walls, electrical wiring and water pipes, but will have to pay out of your pocket for the renovation and purchase of furniture to reinstate your flat back to its original condition, which could add up as a hefty sum.
Depending on the damage to your house after the breakout of a fire, the fire damage restoration costs could vary.
However, it is highly likely that the sum insured from the HDB Fire Insurance Scheme is insufficient to cover the fire damage restoration cost. This would mean that in the event of a fire, you would need to pay out of your own pocket.
Many of you might be wondering: In that case, are there any available options so that I would not need to pay out of my own pocket?
Fortunately, there are other insurance products available in the market to supplement your HDB Fire Insurance Scheme for added coverage.
Home insurance is meant to supplement your existing fire insurance. It covers damages to your flat caused by common disasters such as fire, water pipe damages as well as theft.
In comparison to the HDB fire insurance scheme, the scope of coverage that Home insurance provides is much wider.
| Coverage | HDB fire insurance | Home insurance |
|---|---|---|
| Structural Damage | Yes | Yes |
| Electrical Wiring + Water Pipe Damage | Yes | Yes |
| Renovation | No | Yes |
| Personal Accidents | No | Yes |
| Home Contents | No | Yes |
| Alternative Accommodation | No | Yes |
In addition, you are the beneficiary of the insurance scheme instead of the bank, even if you are still repaying your home loan with the bank.
There are two types of Home Insurance available
Home Insurance by different insurers could offer different coverages as unique selling points to differentiate themselves from other insurance companies. The type of Home Insurance also affects the type of coverage available.
However, there are some areas that most if not all Home Insurance covers:
| Coverage | Scope of coverage |
|---|---|
| Renovations | Home Insurance can cover renovations that you have done, together with the fixtures and fittings that you have installed |
| Home contents | This includes household items and appliances such as washing machines, fridges, television etc |
| Personal liability | This provides you with coverage in the event you become legally liable for a mishap that happens at your home. For example, if a fire starts at your house and spreads to your neighbour |
| Alternative accommodation | In the scenario where your house is inhabitable, Home Insurance gives you a daily payout to find alternative accommodation, capped at a specific number of days |
| Personal accidents | This covers medical expenses or a payout in the unfortunate event of death or disability and is also applicable to your domestic helper |
| Personal items: valuables & money | This offers coverage for your money, valuables and other personal belongings. There is a claim cap for each item type |
| Pets | Could be an add-on. This covers only specific breeds of pets, usually dogs and cats. Dependent on insurer |
To decide on the best possible home insurance plan for yourself, you would first need to understand your needs to ensure that you do not over-insure or under-insure yourself. Some questions you could ask yourself to determine your needs include:
1. How much would your renovation cost if your whole house were to be affected?
This amount is largely dependent on the size of your house. If the renovation of your house is minimalistic, you could make do with lower coverage. On the other hand, if the renovation of your house is lavish and extravagant, you might want to consider plans with a higher insured sum. You could use the costs of your previous renovations as a rough gauge. Else, you could refer here for an estimate.
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2. What is the value of your home contents?
You could come up with a rough estimate of the value of the items at home, such as furniture and other valuable items, and decide on the amount of coverage that you need. Here is an estimate for you.
3. Is the plan able to meet your needs?
Different people place emphasis on different things that are important to them. Some may be more concerned over their pets while some could be more concerned about securing sufficient hospital allowances in case their loved ones got hurt.
In this case, you might want to source a plan that offers the best coverage in the areas that you are more concerned with to best suit your needs.
These three questions serve as a rough guide for you to understand your needs. For a more comprehensive guide and evaluation, you may check out here for a better assessment.
Listed below are some recommendations we have identified that could potentially suit your needs.
Consider this if you want affordable coverage for everything from pet coverage to home assistance.
| Three-room | Mkt avg. | Four-room | Mkt avg. | Five-room | Mkt avg. | |
|---|---|---|---|---|---|---|
| Annual premium | $55.73 | $93.00 | $86.72 | $160.00 | $123.59 | $226.00 |
| Value ratio | 2,193 | 1,315 | 2,306 | 1,364 | 2,023 | 1,423 |
| Renovation coverage | $40,000 | $64,928 | $60,000 | S$122,222 | $80,000 | S$181,000 |
| Contents coverage | $20,000 | $31,203 | $40,000 | $53,561 | $60,000 | $80,280 |
FWD's home insurance offers one of the highest value plans on the market. Not only will you get one of the lowest premiums on the market, but you'll also end up with comprehensive and unique coverage.
This includes alternative accommodation, home assistance, theft or damage to temporarily displaced items and optional covers for your pets and personal accidents. However, it does have low item sub-limits, so those who are looking to protect very expensive valuables (valued at over $1,000) can fare better with other plans featured on this page.
Consider this if you want a great value plan for your HDB flat.
| Three-room | Mkt avg. | Four-room | Mkt avg. | Five-room | Mkt avg. | |
|---|---|---|---|---|---|---|
| Annual premium | $69.16 | $93.00 | $79.42 | $160.00 | $99.03 | $226.00 |
| Value ratio | 1,305 | 1,315 | 1,384 | 1,364 | 1,658 | 1,423 |
| Renovation coverage | $60,000 | $64,928 | $80,000 | $122,222 | $140,000 | $181,000 |
| Contents coverage | $35,000 | $31,203 | $45,000 | $53,561 | $90,000 | $80,280 |
Etiqa's Tiq Home Insurance offers competitive premiums coupled with essential benefits for HDB owners. While its one-year plans already cost 35 per cent below average, its five year plan will save you an additional 15 per cent. For three and five-year plans, Tiq also offers $800 of emergency home assistance coverage for locksmith, plumbing, electrical and pest control services — the highest on the market.
Etiqa's home insurance also offers $5,000 of emergency cash services that can be deposited into your e-wallet as soon as one business day to help you out in the event of a fire.
These benefits can greatly add to your peace of mind, making Tiq Home Insurance both a reliable and budget-friendly home content coverage option for no-frills homeowners.
Consider this if you want a high-value plan that has generous content and renovation coverage.
| Home lite (three-four room) | Mkt avg. | Home (four-room) | Mkt avg. | Home plus (five-room) | Mkt avg. | |
|---|---|---|---|---|---|---|
| Annual premium | $55.50 | $160.00 | $94.00 | $160.00 | $169.00 | $226.00 |
| Value ratio | 1,982 | 1,364 | 1,596 | 1,364 | 1,183 | 1,423 |
| Renovation coverage | $75,000 | $122,222 | $100,000 | $122,222 | $100,000 | $181,000 |
| Contents coverage | $35,000 | $53,561 | $50,000 | $53,561 | $100,000 | $80,280 |
Singlife with Aviva's home insurance products easily represents one of the best value options for HDB owner-residents. This is due to its combination of low price and high coverage for both renovation and content.
However, Aviva does have one flaw: unlike other value options listed here, Aviva's home insurance policies don't automatically cover things like lock replacement and freezer food.
To insure such items, you have to pay an additional fee of at least $15 per item. If you care less about these incidentals and more about covering expensive furniture and renovation works, Aviva could be a great choice.
It is said that ‘Home is where the heart is’. Nothing is warmer than our homes; Our family, memories and precious possessions are all here. Purchasing the right insurance for your property is just as important as choosing the perfect set of furniture or the right flat for you when settling into your new home.
Start searching for the right home insurance to protect you and your family from any unforeseeable accidents now.
This article was first published in ValueChampion.
