Home insurance – you need to buy it, and you need to know how to buy it
A devastating fire can destroy a home. How can home insurance alleviate financial pressure, provide technical support, and help you recover as quickly as possible? When choosing home insurance, the key is to "understand what coverage you need, not just look at how cheap the premium is."
First figure out what you need
1. Distinguish between "building structure" and "household belongings":
Owner-occupied properties generally require building insurance (structural) and can also purchase home and property insurance; tenants usually only need to purchase home and property insurance and third-party liability insurance. Some building management fees include basic public area building insurance, but you need to confirm with the management office
2. Estimate the total value of household assets :
This includes newly acquired value such as renovations, furniture and appliances, clothing, computers, and jewelry. If there are works of art or high-priced jewelry, additional declarations or additional insurance are usually required to avoid "insufficient coverage"
Understand common home insurance coverages
Most home insurance policies cover the following categories; you should check each category to see if it is sufficient when making your choice
1. Home contents:
For losses of furniture and personal belongings caused by fire, burst water pipes, typhoons, theft, etc., many plans adopt the "new for old" compensation method
2. Third-party liability (Public / Legal liability):
For example, if a burst water pipe floods the lower floors or a visitor is accidentally injured in your home, insurance will compensate you for the losses to third parties. In Hong Kong, the common coverage amount is several million to ten million Hong Kong dollars
3. Additional/Supplementary Coverage:
Coverage includes temporary accommodation, moving expenses, food spoilage in the refrigerator, domestic helper's belongings, global coverage for personal items, and accidental death or burns of family members. The specific details vary by company, so please carefully review the terms and conditions
Key metrics when comparing products
When choosing a product, it is recommended to focus on comparing the key insurance coverage, rather than just looking at the "lowest premium":
Coverage Amount and Sub-Limits:
Is the maximum compensation for the entire home and property close to your estimated total value?
Are there specific limits on valuable items (jewelry, watches), such as an overall limit and a limit per item? Are these sufficient for your actual needs?
Deductible (Excess): Higher deductibles are usually available for flooding and landslides; generally, the higher the deductible, the lower the premium. You should assess how much you are willing to bear out of pocket. Some products specify special deductibles for flooding or older buildings; pay special attention to these
Are there any restrictions on building age or building type - such as detached houses, village houses, rooftops, etc.?
Major exclusions include: war, nuclear risks, normal wear and tear, losses due to poor maintenance, and theft/flooding during extended periods of vacancy. You should confirm whether these exclusions affect your daily life
A Comparison of Frequently Asked Questions
| Project | What should we pay attention to? |
|---|---|
| Home and property insurance coverage | Is it close to your estimated total value of all home and property items? Are there any significant category limits? |
| Third-party liability insurance amount | The general recommendation is several million or more, depending on the building structure and neighborhood risks |
| Waiver | Are the deductibles (amount or percentage of loss) for different accidents within an acceptable range? |
| Additional protection | Does it include temporary accommodation, moving, domestic help, and personal belongings worldwide, and are the limits sufficient? |
| Uninsured Matters | Whether items that have been unoccupied for a long time, are poorly maintained, or are specific types of property are exempt from insurance |
Actual selection and purchase steps
Step 1: List and Valuation
List all renovations, major furniture and appliances, and high-value items, and estimate their total value. Record the individual value of particularly valuable items. This will help determine the required coverage amount and whether additional insurance is needed. This will help avoid being accused of insufficient coverage in future claims
Step 2: Target 2-3 companies for the plan
Choose 2-3 plans whose sum assured, premiums, and coverage roughly match your needs, and then delve into their exclusions and deductibles, rather than looking at a dozen products at once and getting confused
Step 3: Understand the claims service and reputation
Pay attention to whether there is a 24-hour compensation/emergency repair hotline, online reporting channels, and whether the claim documentation requirements are simple. These factors will greatly affect your experience when an accident actually occurs
If you're looking for home insurance, AWM has a strong partner network and a professional team to create the most suitable protection plan for you. Want to know more? Contact us today
