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Insurance for home owners

Insurance for home owners

  • 16 October 2018
  • OCBC Home Loans

Home insurance protects your home and valuables against unexpected dangers such as fire and theft. Learn more about the different types of home insurance available, and give yourself and your family a peace of mind.

What is Fire insurance?

Fire insurance covers the loss or damage to the building structure and the original fixtures and fittings of the property. Examples of original fixtures and fittings include the original flooring, ceiling, doors, and windows provided by the developers. It is important to note that any improvements made or renovation work done by the owner or a previous owner, the household contents, personal belongings and valuables in the home are not covered in the Fire insurance policy.

Most owners mistakenly think that Fire insurance only covers the loss or damage to the building as a result of fire. In actual fact, fire insurance coverage may extend to other events such as explosions, bursting and overflowing of water tanks and pipes, malicious damage etc. The extent of coverage for such other perils varies across different fire insurance policies, and you should refer to the terms of the relevant fire insurance policy if you need specific information on the extent of the insurance coverage.

What is Home Content insurance?

Home Content insurance is a policy that complements Fire insurance. It is a more comprehensive form of home protection insurance that protects the homeowners against loss or damage to improvements or renovation work done by themselves or a previous owner, household contents, personal belongings, and valuables within the home. More than often, most homeowners overlook getting their property covered under Home Content insurance as it is commonly mistaken that Fire insurance covers them all.

Items such as the walk-in wardrobe, vinyl flooring, furniture, electrical appliances, watch collections, luxury handbags will be covered under Home Content insurance. Similar to Fire insurance, Home Content insurance covers a series of events such as fire, lightning, explosions, and on top of that, burglary.

What else is covered in Home Content Insurance?

In addition to physical items in the home, Home Content insurance covers the owner and the household members with respect to any bodily injuries suffered in the event of an accident. The owner and the household members are also covered for any legal liability to a third party arising from an accidental bodily injury, death, and damage of property; this is useful in the case whereby a fire occurs within a home and spreads to the neighbor’s unit, as the home owner will be liable for any loss or damage suffered by the neighbor.

Home Content insurance also provides benefits such as reimbursement for the cost of temporary accommodation or loss of rental income, should the property be under restoration.

How much coverage is sufficient?

The amount of coverage is dependent on the desired amount a homeowner wishes to be covered for. A good gauge will be the total cost of the renovation, household contents, personal belongings and valuables within the home. It is also important to review the policy annually to ensure sufficient coverage, or should there be a major renovation or an addition of high-value items to the home.

What is Mortgage insurance?

Mortgage insurance covers the liability, which is the outstanding housing loan, for a home owner such that in the event of death, permanent physical disability, or diagnosis of a critical or terminal illness, the dependents for the home owner do not also end up losing the roof over their head. The extent of coverage varies across different mortgage insurance policies. Please refer to the terms of the relevant mortgage insurance policy if you need specific information on the extent of the policy coverage.

Our homes are our biggest assets, but they can also be our biggest liability without proper planning. Since most of our home purchases are financed via a home loan, the burden will naturally pass to the family members should something unfortunate happen to a home owner; and this is what mortgage insurance is supposed to deal with.

Should you take up Mortgage insurance if you have Life insurance?

Although both Mortgage insurance and Life insurance do share some similarities in terms of providing extensive coverage (e.g. death, TPD, critical illness, terminal illness, or premium-waiver, etc), Mortgage insurance serves a very different purpose as compared to Life insurance.

The payout from a Life Insurance plan should be used to cover daily family expenses (e.g. transport fee, groceries, etc.) and costs of living; while Mortgage insurance is meant to cover the outstanding home loan, thus ensuring a constant roof over the loved ones of an insured person.

How much coverage should I take up?

As a general rule of thumb, the Mortgage insurance term should match the home loan repayment term. For example, if your home loan repayment schedule is 30 years, you should get Mortgage insurance with a term of 30 years. The second rule of thumb is that the sum assured, that is, the coverage on your Mortgage insurance, should also match the home loan amount and repayment schedule.


The information provided herein is for general information only. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The information provided herein does not constitute an offer or solicitation by OCBC Bank to provide loan or financing to any particular person, nor does it constitute a recommendation by OCBC Bank to any person to enter into any transaction. These plans do not have any cash value.

No representation or warranty whatsoever in respect of any information provided herein is given by OCBC Bank. All information presented is subject to change without notice. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein. Any reference to any specific entity, authority, area, figures, property or asset class in whatever way is used for illustrative purposes only and does not constitute a recommendation on the same.

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