It is challenging to own a property in Hong Kong. Even those who have succeeded in owning a property may rent it out for a period of time to earn some income. Whether you are a landlord or a tenant, buying a home insurance policy (typically around HK$500 for an annual plan) is a smart move. For example, you can be insured against loss of household goods caused by windows broken in a typhoon. For those unfamiliar with the subject of insuring your home, MoneyHero.com.hk has identified some common topics that every homeowner and tenant should consider.
Friendly reminder: Home Insurance
After investing millions in a comfortable home, why not spend a few hundred dollars more on a home insurance policy to provide full coverage for your residence? It provides financial protection from a range of incidents such as the need to change your door locks, house burglary or water seepage causing property damage. A one-stop platform like MoneyHero.com.hk provides convenient comparisons of different plans from top insurers, as well as, an online purchase option where your insurance plan will take effect immediately. For a limited time, you can also enjoy a 20% discount so you can protect your belongings for an annual fee of HKD$420 only!
1/ Precautions for Home Insurance and Insurance Applicants
Owners and tenants each have their own responsibilities. Therefore, they should separately purchase home insurance to protect against any sudden or unpredictable losses.
For owners, it is generally recommended to purchase Fire Insurance and Household Content Insurance (which includes third party liability insurance). So what is fire insurance? In simple terms, it is ‘Building Insurance’, which is to protect the structure of the building. In case of building collapse, the owner will be insured. Household Content Insurance is to protect the interior of a home, including home property, any accidents and unforeseen losses and damages, such as fire, flooding, explosion and theft. Household Content Insurance also includes third party liability insurance, which will protect the owners from legal liabilities arising from accidents in the public areas of the building.
In 2018, the fierce impact of Typhoon Mangkhut was felt across all of Hong Kong. With winds of over 200 km/h, an estimated 500 windows were shattered by strong winds causing contents of homes to be soaked by rain water and a host of other damages. Those with home insurance would have received various types of assistance like Zurich’s “Emergency Home Assistance Services” which includes free electrical repair, plumbing services, and referral assistance for service providers thereby eliminating the added worry of getting qualified workers to deal with emergency repairs. In addition, a plan like the “Basic Coverage” will protect against loss of household content caused by accidents, too.
2/ How to Calculate the Cost of Home Insurance?
Currently, most home insurance is calculated based on the floor area of the property. Your home insurance premium will rise commensurate with the desired level of compensation. Therefore, thoroughly evaluating the advantages and disadvantages of major home insurance companies and specific insurance policies is highly recommended as you could save as much as HK$700 per year. Let’s take a home of 500 square feet for example. The annual premium can be anywhere between HK$500 and HK$1,200, compensating between HK$300,000 and HK$1,500,000 for loss or damage to household contents. Currently, you can enjoy 20% discount when you buy home insurance through MoneyHero.com.hk. In addition to a convenient online platform for comparison and purchase, a specialist team is available to help you find the right coverage at the best price.
3/ What does Home Insurance Mainly Insure?
You should pay attention to some basic coverage, such as Household Content insurance and Worldwide Personal Effects insurance. If you have a domestic helper, you should consider Domestic Helpers’ Personal Belongings coverage and if you own a pet, you should consider Pet Insurance plans.
Household Content Insurance
A key consideration in selecting the right home insurance plan is coverage of household personal belongings. Using a 500 square foot home as an example, compensation ranges between HK$300,000 and HK$1,500,000. There are two aspects that people are more concern about, “Valuables Insurance” and “Burst Water Pipes or Water Leakage Insurance”.
1/ Valuables Insurance
Let’s first talk about “Valuables Insurance” which includes jewellery, antiques and art. The maximum insured amount per item/set is about HK$10,000-HK$30,000. However, if you think the insured amount is not enough, you can customise the insured amount. Let’s take Allied World’s “Home Guard” for example. If you would like to insure precious jewellery for a value of HK$100,000, the premium rate is 1.65%. Your valuables can be insured for an additional HK$1,650 (HK$100,000X1.65%=HK$1,650).
2/ Water Pipes Burst or Leakage Insurance
Most people are particularly concerned about insuring against burst water pipes or water leakage due to the potentially high cost and inconvenience of such incidents. Insurance companies like Zurich offer “Emergency Home Assistance Services” round the clock through the “HomeChoice Insurance Plan” which includes electrical repairs, plumbers, locksmiths, and referral services. This is immensely helpful in times of emergency. When you’re choosing an insurance plan, take the time to read all related information so you pick a suitable one to protect your home.
Worldwide Personal Effects Insurance
Even if you are out of the country, whether it is for business or pleasure, some of your personal belongings will also be insured. That said, not every insurer covers the loss or damage of mobile phones, tablets and laptops. If this is an important aspect of coverage for you, a plan like Zurich’s “HomeChoice Insurance Plan” will compensate for the necessary repair costs due to accidental damage of mobile phones, tablets or laptops during your travel. Worldwide Personal Effects Insurance can be customised. Take Allied World’s “Home Guard” for example: You can bring your valuables overseas with you and still be insured. Should you feel the insured amount is inadequate, you can customise it, premium rate being 1.65%.
Domestic Helpers’ Personal Belongings Coverage
Domestic Helpers’ Personal Belongings Coverage protects the loss of personal belongings of domestic helper(s) in your home. For example, Allied World’s ‘Home Guard’ has a compensation of HK$10,000.
Pet Insurance Plans
Some home insurances include Pet Insurance Plans which offers financial protection if your pet(s) needs veterinarian treatment due to an accident or illness. Let’s take Dah Sing “HomeSure Household Insurance Plan” as an example. Plan B and C provide up to a maximum benefit of HK$3,500 per year. Outpatient expenses are compensated up to HK$300/visit/day; X-Ray and laboratory tests are compensated up to HK$2000, HK$1000/visit/day.
*The information above is only for reference and is subject to the terms of the insurance company.