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What kind of property insurance do I need for my home?

September 14, 2021

You finally pulled the trigger and bought your first home, or you’re trading up to a bigger apartment for a growing family. Whichever the case, congratulations! Home purchase is usually one of the biggest financial decisions one makes in life, especially in Hong Kong where property prices are among the most expensive in the world. That means it is imperative for homeowners to have the right property insurance in place to protect them from fire, theft, burst pipes, and other risks.  

Home insurance is an umbrella term that covers different types of coverage for a residence. Here are the most common, and important, coverages to have as a homeowner:

Fire Insurance (Building Insurance) 

Fire Insurance is the most fundamental of property insurance, covering damages to the structure and permanent fixtures of your home, as such walls, ceiling, and floor. If you’re taking out a mortgage, your lender will require you to obtain fire insurance for the property before approving your loan. Fire insurance plans are quite similar in coverage across providers, and most give policyholders the option to extend protection to other hazards, such as typhoons, sprinkler leakage, or riots.    

There’s a lot to take care of when buying property, so many homebuyers may choose to buy fire coverage through their lender bank. However, they don’t always get the best rate that way. Take your time to shop around, and you’d be surprised at the savings you can pocket. OneDegree Fire Insurance is an affordable alternative and has a best-price guarantee.

Fire insurance won’t cover the contents in your home (think furniture, TV, refurbishments, electronics, etc.), which leads us to Home Content Insurance.

Home Content Insurance

You may have spent a lot of effort and money furnishing and decorating your dream home. It is also a place where we tend to keep our most prized possessions. Therefore, as a homeowner, it’s important to make sure the contents in your home are also protected. Unlike Fire Insurance, Home Content Insurance options are more diverse as homeowners’ needs vary greatly.

In addition to providing financial assistance when items in your home are damaged, some plans offer extra benefits you may find useful. For example, certain policies will cover damages to items during a move and cover the costs of alternative accommodations when your home is under repair. Some plans will even provide compensation when accidents happen to you or your family members at home or offer a 24-hour assistance for plumbing and other home assistance needs.

Legal Liability Insurance

Many home insurance plans will include legal liability coverage, which protects you in the event of a third party injuring themselves in your home or damages caused to another’s property due negligence on your part. You can also purchase liability protection separately or top up on what your existing policy offers to give you an extra peace of mind.

Comprehensive Plans

You’ll often see plans that bundle all three types of property insurance together, and possibly other additional protection such as construction or burglary insurance. Comprehensive plans are good options for homeowners who are willing to pay higher premiums for greater protection. 

Before deciding on your home protection, weigh the benefits provided and your actual needs. Many homeowners find they are adequately covered with a fire insurance policy (as mentioned, coverage is almost identical across providers) and a basic home insurance plan. They would also be paying lower premiums than if they went with a comprehensive plan.

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