Frequently, I encounter homeowners in Singapore often question the need for home content insurance as they believe fire insurance is sufficient. However, it is important to note that while fire insurance is compulsory when obtaining a mortgage, it solely covers harm to the building’s structure and not personal belongings. On the other hand, home content insurance provides coverage for personal possessions, furniture, electronic devices, jewelry, and renovation fixtures such as built-in cabinets and wardrobes. It also protects against damage or loss caused by theft, burglary, water damage, accidental breakage, and natural disasters like earthquakes or floods.
Considering that there are about 3,000 fires annually in Singapore, with a fire incident in about 1 out of 480 residential units per year, the financial impact of a fire can be significant, especially if it results in damage or loss of personal belongings or liability claims.
Home content insurance can also cover potential liability claims arising from fire incidents. If a fire in your home causes damage to neighboring properties or results in injury or loss of life, you may be held liable for damages. In such cases, liability coverage under home content insurance can provide financial protection against the potential financial damages you may incur.
One example of a high-profile fire incident resulting in significant financial liability occurred in Bukit Batok in 2019. The fire, which started in a unit on the fourth floor of an HDB block, spread to adjacent units on the same floor as well as units on the third and fifth floors. A total of 11 units were affected. The homeowner responsible for the initial fire was held liable for the damages, which were estimated to be around S$2.2 million.
In this case, having home content insurance with liability coverage would have been invaluable for the homeowner, as it would have provided financial protection against potential losses. Without it, they may have been forced to pay out of pocket for damages and suffered significant financial losses.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
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