It is important to understand that home insurance is not just one policy. Home insurance policies can be divided into two main categories: home buildings insurance and home contents insurance. Both of these home insurance cover an accidental fire, but in a slightly way, and that’s what our today’s article is about.
What is home insurance?
In general terms, home insurance policies refer to buildings insurance and are set to protect your house as construction, in case it gets damaged by weather or other natural disasters and perils. Usually, home insurance is a combination of buildings and contents insurance, and such policies cover the costs resulted in damage to the building such as roof, ceiling, walls, floors, etc., and content of your house such as furniture and appliances.
As you can see, home insurance and home contents insurance don't always cover the same things, and thus these home insurance policies cover an accidental fire differently.
Do I need home insurance?
Sometimes, a bank, or any other mortgage provider, might require you to purchase home buildings insurance. It is not a legal requirement, however, for a financial institution, it acts as a safety net. It guards the investment against loss or damage caused by covered risks such as fire, typhoon or vandalism.
Besides the above situation, Kwiksure Hong Kong advises its clients to consider home buildings and home content insurance, with a cover especially for fire, because fires, in the majority of cases, leave nothing behind. Read here our top tips on how to keep your home protected from the weather and intruders in Hong Kong.
What events are covered under home and contents insurance?
Most common events that are covered under home and contents insurance are natural disasters, damages related to weather, such as typhoons, fire, and lightings. It’s important to note that not all natural or weather-related disasters are covered under a standard home and contents insurance, and it’s crucial to know and understand your policy wording.
Other costs that are resulted from other things such as vandalism, and theft, among other perils as described in the policy, are also covered.
Do I need extra fire policy for my house?
In case of fire, a home policy also covers the costs related to relocating and additional living expenses if the damage to the house is too high. However, what this policy doesn’t cover is the liability in case someone gets hurt or is dead during a fire on your premises.
Fire and extra perils insurance can also extend the coverage to other perils such as an earthquake, flood, landslides, and even explosions.
It’s also good to know that there are two major exclusions to fire coverage under home insurance policies. One of them is arson - a fire deliberately set by the owner. In such case, there will be no coverage, and that case can land in court, as arson is insurance fraud.
Another exclusion to a regular fire coverage is a fire in a vacant home. If the insurance company can prove that at the time of the fire, the house was empty for at least 30 consecutive days, it has the right to deny coverage. If you are a landlord, and sometimes find yourself in a situation where your premises are not occupied for more than 30 days in a row, you should consider adding this coverage to your standard policy, for ultimate peace of mind.
How are home and contents insurance premiums calculated?
Calculating premiums for house insurance, or the buildings insurance, is relatively simple. Premiums are calculated based on the market value of the house/apartment, and that becomes the total insured sum. With the contents insurance, however, estimating the total costs of the house “contents” can be a bit trickier, as in general, it is harder to do it on your own. In many cases, a broker or the insurance company will help you with that.
Get help with choosing the right home insurance
Whether you are new to home insurance or looking to review your current policy, don’t be shy to ask for our help! Our team of insurance advisers at Kwiksure is here to answer all your questions, prepare you with a free personalized quote, and compare different plans and options, so they can match your needs, expectations, and budget! Contact us today!