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 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 provides convenient comparisons of different plans from top insurers, as well as, an online purchase option where your insurance plan will take effect immediately.
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. Home insurance may protect against loss of household contents caused by accidents.
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 of major home insurance companies and specific insurance policies is highly recommended.Let’s take a home of 500 square feet for example. The annual premium can be anywhere between HK$500 and HK$1,600, compensating between HK$300,000 and HK$1,500,000 for loss or damage to household contents. MoneyHero offers extra rewards if you purchase your Home Insurance through our comparison platform, saving you time and money! A specialist team is also available to help you find the right coverage at the best price.
3/ What does Home Insurance Cover?
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 concerned about, coverage for valuable items.
1/ Coverage for valuable items
Coverage for valuable items usually include high value items such as 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, the amount may be customised. Let’s take Allied World’s Home Guard for example. If you would like to insure valuable jewellery worth 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/ Emergency Home Assistance Service for burst pipes
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. Personal effects insurance can also 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 the value of protection, premium rate being 1.65%.
Domestic Helpers' Personal Belongings Coverage
Having coverage on domestic helpers' personal belongings helps cover 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 coverage 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.