Insuring a Property
Home insurance in Hong Kong is normally low on the list of priorities as a result of good security at most places, as well as with Hong Kong’s good fire & building regulations.
However it is a must for those taking mortgage finance to ensure that building insurance cover is in place because in the event of a catastrophe (e.g. total loss caused by fire), you as the owner are still liable to the bank for the mortgage. The good news is that most banks’ mortgage departments are efficient and usually make sure that cover is in place in order to protect the bank’s exposure to the mortgage.
Even so, you need to know whether you as the owner should get your own insurance for your particular apartment or whether the building management company has a block buildings policy. Your contribution to the insurance premium would normally then be included within your monthly management fee.
Ok, so you have fire insurance covered; how about if you have drainage blockage or burst water-pipe; this not only damages your property but those apartments below you. How about falling objects such as a window coming loose or a railing fittings falling down? There is a question of who is liable if anyone gets injured. This is where it is recommended to have an insurance company covering both building insurance and contents insurance just in case there is an argument as to whether the nature of the insurance claim falls within the scope of the buildings insurance. You don’t want to be caught between the ‘devil & the deep blue sea’ and be at risk of an insurance squabble. Where this is unavoidable e.g. where building management company holds a block policy, you need to check the exact terms and scope of your policy and preferably ask a professional to make sure that your contents policy covers the rest. Typically, you should at least expect the following from your home insurance policy:
- All risks on contents (say HK$1m) including e.g. fire, theft, typhoon, flood, water damage, landslide as well as other types of accidental damage.
- Contents includes furniture, fixtures, fittings, domestic appliances, and personal effects including (clothing, valuables should be automatically included as well as “new for old” i.e. when you claim, you are entitled to a new item and not the depreciated valued of a second hand ‘old’ item).
- Personal Accident (limited minimal) cover is often included free of charge, alternate accommodation expenses, temporary renewal by professional mover when moving apartments, removal of debris, architects and surveyors fees, locks replacement (theft and burglary only) personal computer, frozen foods, domestic helpers personal effects, money & credit cards cover.
- Optional world-wide personal effects is also widely available for those personal items you regularly take with you out of the home or travel with (don’t forget separable travel insurance when you go aboard).
- All risks buildings insurance option to cover the full re-instatement cost of your apartment in the event of any damage.
Please remember that insurance companies are not charities and you need to check the sum insured limits, exclusions and find out what is and what is not covered.
For the sake of a few thousand HK$ per year, it is worth its weight in gold to find a quality home insurance
- For peace of mind
- Protection of your belongings & property
- Protection against claims for damage that are your responsibility
