SINGAPORE: After a fire ripped through two flats in Toa Payoh on Tuesday (Jul 29), two home owners were left grappling with the loss of their units and belongings.
The owner of the unit where the fire started told CNA that “everything is gone” and that his children now have “nothing”.
Of the 1,990 fires the Singapore Civil Defence Force (SCDF) responded to last year, nearly half – 968 – were fires involving residential buildings.
How does a home owner recover financially after a fire? What is covered by insurance – and what type of insurance is needed?
What is fire insurance?
There are two types of insurance home owners can use to cover their homes and belongings – fire insurance and home insurance.
For those with outstanding Housing and Development Board (HDB) or bank loans, fire insurance is compulsory. Home owners buy this with HDB’s appointed insurer or with the bank providing the loan.
Owners of HDB flats whose loans start on or after Sep 1, 1994 must buy and then renew their fire insurance plans every five years.
The insurance scheme is meant to help alleviate the financial burden of repair works in case of fires. It covers the cost of reinstating damaged internal structures, fixtures and areas built and provided by HDB.
The premiums apply to a five-year term, and the price and coverage vary depending on the type of flat.
For instance, the current five-year premium for a four-room HDB flat is S$4.59 (US$3.55) and insures a sum of up to S$117,000. The premium for a two-room flat is S$1.99 and covers costs of up to S$57,000.
The current insurance provider – from Aug 16, 2024 to Aug 15, 2029 – is Etiqa. The provider for the five years prior was FWD.
Many scenarios are covered under Etiqa’s policy, including aircraft damage, smoke damage and malicious damage.
The insurance also covers loss or damage to the insured property resulting from a fire in an adjoining property, as well as any loss or damage caused during the operation to extinguish the blaze.
For condominiums, the management corporation is responsible for insuring the buildings and common property for fire damage.
Condominium owners with bank loans will also have to buy fire insurance.
After the loan is fully paid, HDB or condominium home owners are not legally required to maintain fire insurance.
But continuing coverage is “strongly recommended”, said Ms Shirley Tan, chief marketing officer of Etiqa Insurance Singapore.
“Home owners should consider the risks as a fire can cause serious financial implications, especially when affordable coverage options are readily available to ensure home owners have peace of mind,” she added.
But what fire insurance does not cover is the contents of homes – for example, furniture, clothes or jewellery.
Related:
‘Most of the things are gone’: Toa Payoh resident’s flat gutted by fire that started one floor down
Owner of burnt Toa Payoh flat fears for future, says his three children now have ‘nothing’
What is home insurance? What does it cover?
Home insurance is different from fire insurance – it is optional and can be purchased from several insurers.
The types of coverage differ across insurers, but they typically cover household items and personal belongings. In most cases, they also cover the cost of renovations after a fire, the removal of debris and other repair costs.
Some insurers cover the cost of alternative accommodation and day-to-day costs, but only up to a certain amount.
People should buy home insurance if they want to cover their personal belongings at home, said Ms Chen Xueyi, a senior financial consultant with an…
