By MoneyBees
Work out the home insurance cover you need: what HDB fire insurance or your condo's MCST policy already covers, the sum insured for renovation, furniture and belongings, and a landed home's rebuild cost on GIA's method.
No, not for most owners. HDB fire insurance reinstates the flat's internal structure, fixtures and areas HDB built. It does not cover home contents such as furniture, renovations and personal belongings.
Only HDB fire insurance is, and only for owners with an HDB loan that started on or after 1 September 1994; it is renewed every 5 years while the loan is outstanding. Home contents insurance is optional.
GIA describes it as cover for furniture, renovations and personal belongings against loss and damage from perils like fire, flood, burglary and theft, often with extras such as alternative accommodation. Tenants can buy it too.
The management corporation (MCST) must insure the building and common property under the Building Maintenance and Strata Management Act. You insure your own renovations and contents.
Add up what it would cost to replace your renovations, furniture, appliances, clothes and valuables today. That total is the sum insured to ask for.
GIA's method: construction floor area times the building cost per square metre, plus built-in fixtures, plus 10% professional fees and 5% for demolition and debris, plus 9% GST. GIA's example of 230 sqm at S$3,000 comes to about S$896,253.
No. GIA points out that the purchase price includes land and the seller's profit, while a policy pays the cost to rebuild. Too low a sum insured cuts a claim; too high means paying more premium than needed.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).