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Insuring Property
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Insuring your home is important. Make sure you read these tips to help you understand what is at stake when buying home insurance. |
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1. General information on home insurance in Hong Kong
Home insurance is basically divided into three parts, namely building, contents and personal liability.
- Building: It covers the structural damage of the premises as a result of fire, water damage, windstorm and landslip. Items on the home insurance usually include most of the structural parts of your home i.e. the building structure, fixtures and fittings provided by the developer or previous landlord, such as floors, ceilings, walls, doors and windows.
- Contents: It covers the amenities, contents and fixtures & fittings provided by the residents (excludes those provided by the developer or previous landlord), such as furniture, electrical appliances, jewellery and collections.
- Personal liability: It covers any claim against you or any member of your family in the event of your negligence causing a third-party (e.g. pedestrian or tenant) bodily injury or property damage.
If your premises is to be rented out, you are advised to take out home-building insurance. Also, personal-liability insurance will cover your loss and liability (e.g. falling windows).
If you live in your premises, in addition to home-building and personal-liability insurance, you are advised to take out home-contents insurance. |
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2. Steps for taking out home insurance
a. Make a note of the gross floor area. You have to know the gross floor area - not the actual floor area - of your premises in order to calculate the sum insured and premium for home insurance.
b. Classify your household property into three categories: furniture, electrical appliances, home and personal belongings. List the items under each category and don’t underestimate the quantity of your apparel, books, VCDs, etc.
c. Calculate the sum insured according to actual needs. If you keep valuables, collectibles or appliances at home or if you have expensive interior decoration, you definitely need to set higher the sum insured.
- Calculate the replacement value. When calculating the value of your household property, please base it on the replacement value.
- Declare special editions. You should declare your books’ or VCDs’ special editions as they are usually not defined as “valuables.”
d. Check and record your property periodically. Keep a receipt, or take pictures of, your valuables for record purposes in order to facilitate future claims. |
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3. Tenants and landlords' obligations
If you own a property and rent it out, you are advised to take home-building insurance that covers any potential structural damage of the premises as a result of fire, water damage, windstorm and landslip. Furthermore, taking out a personal-liability insurance also covers the loss & liabilities you bears as a landlord of the premises in respect of accidental bodily injury or property damages suffered by a third party. |
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4. Choosing an insurance provider
- Don’t just compare the premium or the giveaways
- Choose the insurance company that best suits your needs
- Choose a reputable insurance company
An insurance company that provides prompt and efficient claims and customer service is essential. Some insurance companies acknowledge claims within two working days and dispatch cheques within five working days of receipt of all relevant claims documents. |
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5. Costs
a. Home-building insurance. This cost is based on usage (e.g. industrial or residential), age of building and maintenance level. It also depends on the size of, and amount outstanding on, any mortgage.
b. Home-content insurance which is based on two elements:
- The gross floor area and the pre-set risk types (For example, for a gross floor area of up to 500 sq ft an annual premium can cost you around HK$800)
- insurable items or different risk types. For example, the annual premium can be 0.6 per cent of sum insured.
c. Personal liability. This cost is usually tied-in with home-content insurance. You can also enquire about a landlord-liability insurance plan for landlords who rent their premises. |
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6. Domestic-helper insurance
As an employer, taking out domestic-helper insurance helps you fulfil your legal obligation. Most domestic-helper plans provide a comprehensive protection covering employees compensation cover, clinical expenses, surgical and hospitalisation expenses, service interruption cover, dental expenses, personal accidents benefit, repatriation expenses, replacement helper expenses, fidelity guarantee cover and so forth. The annual premium is about HK$750. |
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