Is fire insurance compulsory?
Our Buildings in most situations are our most valuable items, a short circuit or fire can result in a fortune of costs . In the event of a fire, fire insurance covers your property against losses or damages caused by fire, lightning and explosion caused by domestic gas.
Is fire insurance compulsory?
Fire insurance is not mandatory. However, if the property is mortgaged, the mortgagee will require you to have a fire insurance policy on the outstanding loan amount.
Can I insure the contents of my home?
Yes you can. The contents of your home, including furniture, carpet, TV, computers, books, lamps, ornaments, appliances, kitchenware and personal effects can be insured as well. Often, a contents insurance policy is issued separately from your fire insurance policy, although some insurers issue a combined policy.
What am I covered for under a fire insurance policy?
Most policies cover physical damage to your property arising from following the perils: Aircraft Damage, Earthquake and volcanic eruption, Storm, Tempest, Flood, Explosion, Impact Damage, Bursting or Overflowing of Water Tanks Apparatus or Pipes, Bush / Lalang, Subsidence and Landslip, Spontaneous Combustion, Riot Strike and Malicious Damage, Damage by Falling Trees or Branches and Object
How much should I insure for?
It is important to ensure your property at the correct amount. When insuring your house, the sum insured should be the total cost to rebuild or reinstate it and including the professional fees and removal of debris. The sum insured value is not the actual property value, but rather the cost of reconstruction of your home.
You may refer to the PIAM calculator as guide only to assist you in determining the estimated sums to be insured.
Before using the calculator, you also have to take note of :-
If any renovations have been made to your property, you are advised to indicate the amount (cost of renovation) in the box provided in the BCC.
If your property has unique or special design features and/or have extensive renovations and/or have complex structures affixed, you are advised to obtain professional advice for a more accurate assessment of your property.
What is a reinstatement clause?
Reinstatement cost refers to the cost of reinstating the building back to its original condition. This excludes the foundation and the value of the land. The reinstatement value is a method of claim settlement under a fire insurance policy.The reinstatement clause works on the principle of indemnity. This means that the damaged property or asset can only be replaced with a new asset of the same kind, type and specifications. For example, if your chemical machinery was damaged in a fire, you cannot get the reinstatement cost of textile machinery. Similarly, the model, technology version as well as the output capacity of the asset should also be the same as the previous one. The insurance company will not pay for the cost of replacing the damaged asset with a more advanced one as the older asset did not possess the same advanced technology at the time of policy purchase.
What happens if the sum insured is inadequate?
For a house, if the sum insured is less than the full reinstatement cost, in paying the claim, the insurance company will pay the full sum insured if there is a complete destruction of the property. However, if there is only a partial loss, the insurance company will pro-rate the payment according to the proportion of under-insurance.
What type of questions will be asked about my property?
Examples include: –
- Has the property ever suffered any loss?
- Occupancy of the property
- Details of the property to be insured
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