Fire insurance, as the name implies, protects you from financial ruin if something unexpected happens to your home in case of a fire. But that, in fact, is not the only peril most plans in the market cover. Mishaps you're protected against is usually pretty broad, from fire to lightning strikes, explosion, water damage and so on.
The premium you have to pay for a fire insurance policy is calculated by applying a rate percent to the sum insured, which is usually based on either:
Right now, the sum insured in most plans are set based on the full outstanding mortgage amount. That’s why the sum insured – and your premium – goes down year by year at the time of renewal. And by the time when your mortgage term ends, the sum insured will instead depend upon the rebuilding value of your property looking at factors such as location, GFA and the neighborhood that you’re living in. If you buy fire coverage through an insurer or bank in Hong Kong, the premium rates in general range between 0.03% and 0.15% of your sum insured.
Here’s a look at what the fire insurance policies available in town cover and how much they cost:
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