- Basic Fire Policy: Cover against loss or damage to insured property caused by fire, lightning or explosion.
- Houseowner Policy: Cover the household contents including coverage for fatal injury to the owners (as the insured), but it does not cover damage to the house itself.
- Householder Policy: Additional loss or damage due to flood, burst pipe, etc.
| Description of the Coverage | Basic Fire Policy | Houseowner Policy | Householder Policy |
| Damage caused by fire, lightning & explosion (caused by gas used for domestic purposes) | Yes | Yes | Yes |
| Damage caused by aircraft, explosion (caused by gas used for non-domestic purposes), vehicles, animals, bursting or overflowing of water tanks or pipes, electrical installations, windstorm, tempest, earthquake, volcanic eruption and flood. | No* | Yes | Yes |
| Theft with forced entry | No | Yes | Yes |
| Loss of rental | No* | Yes | Yes |
| Liability to 3rd parties's accidents | No | Yes | Yes |
| Death compensation for the insured | No | Yes | Yes |
| Subsidence and landslide * | No* | No* | No* |
| Riot, strike and malicious damage * | No* | No* | No* |
| * These exclusions can be covered under your respective policy for an additional premium. | |||
The insurance coverage is not on the value of the property but rather for the cost of re-constructing it and replacing its contents, while at the same time ensuring the owner and his/her family is protected as well. Therefore, if it is wished to have comprehensive coverage for the house and the contents, one should buy a house owner policy and a householder policy.
There are 2 ways that the owner could reimburse from the insurer:
- Reinstatement value basis: Full cost of repairing damages without any deductions for wear, tear or depreciation (provided that the sum covered is adequate to cover the total cost of repair).
- Indemnity basis: Cost of repairing damages after deduction for wear, tear and depreciation.
Apply the following questions to evaluate the type of insurance policy that suit your needs:
What should you do when getting a home insurance policy?
For owner who keeps valuable items (i.e. jewelries, expensive collections, etc.) at home, it is worth considering to have a household insurance policy. Once insurance policy is purchased, it is advisable to:
What to do after an undesired event?
The following are the steps that should be taken for insurance claim an undesired event (i.e. home damage due to a disaster, etc.):
It is advisable to submit the insurance claim at the early stage soon after the undesired event. This is to avoid any prejudice on the claim as the delay in submitting the claim it may cause suspicious impression and may further delay the claim process
Submit claim to the insurer with:
If there is a damage of the electrical appliances, submit repair bills for reimbursement.
If it is required to do immediate repair, such as replacing the front door to prevent further break-ins, one should ensure that these are carried out immediately and the receipts are kept as part of the claim.
If major repairs are required, such as rebuilding the wall or the rooftop, one should obtain estimated cost for the repair and obtain the consensus/approval from the insurer before commencing with repairs.
What is the risk of under-insured?
Being under-insured can be extremely costly and stressful if one loses his/her home. One is considered to be under-insured if his/her insurance coverage is less than 90% of the rebuilding costs in the event of loss or damage.
One can also be under-insured for his/her home contents if he/she does not have enough home contents insurance to replace the things, especially the jewelries and expensive collections.
For example:
If on paper, the total cost to rebuild a house = RM 500,000
And, the sum insured under the insurance policy = RM 400,000
During an undesired event (e.g. house fire), the incurred loss = RM 100,000
When submitting the claim, the reimbursable sum from the insurer = RM 400,000/RM 500,000 x RM 100,000 = RM 80,000
Hence, the home owner will have to bear the difference of RM 20,000 from his/her own pocket.
Ensure that the property is adequately insured at all times, and include the cost of renovations and enhancements made to the property. Check that there is adequate coverage each year when renewing the insurance policy or changing insurers.
Assess and decide on the insurance premium wisely
Do not include everything that is not necessary - Check carefully the insured list to exclude any unnecessary items from the coverage. For example, it may be required to insure a 10-year-old toaster washing machine as it is may be a low-value item at a depreciated rate.
Install safety equipment - The insurance premium can be lower if the house is equipment with safety measures, such fire alarm(s), portable fire extinguisher(s), etc.
Avoid unnecessary add-ons - Owner should evaluate the add-ons carefully to only insure what is need instead of taking the additional coverage just because it is there. For example, add-ons l such as loss of rent will only increase your premium.
It is advisable to check the insurance coverage carefully before committing to the policy and to consider having the home insured against natural disasters. Always compare the policies and premiums from a few insurers before choosing the best one that suits the needs.
It is a misconception to think that insurance coverage is not required at all if one stay in a rented property as the property may be belong to the landlord but the contents inside the property belongs to the tenant. Hence, one (as the tenant) may need insurance against any damage to the contents.
If one stay in an apartment or condominium, the building management usually gets the building insured and factors it into the monthly charges payable by the residents.
However, it is advisable that the owner should get a copy of the individual insurance certificate to check the coverage taken up under the master policy by the condominium management.
- What disasters does the policy cover?
- How do they define each disaster?
- How much will be the coverage?
- Does the policy provide enough insurance to cover the cost of rebuilding your house & any extra costs that might incur on you?
- In what circumstances will the insurer reject a claim?
What should you do when getting a home insurance policy?
For owner who keeps valuable items (i.e. jewelries, expensive collections, etc.) at home, it is worth considering to have a household insurance policy. Once insurance policy is purchased, it is advisable to:
- List down the items to be covered under the household insurance policy (e.g. purchase year, model no., value, etc.);
- Take the photos of the insured items; and
- Keep the purchase receipts or warranty card(s).
What to do after an undesired event?
The following are the steps that should be taken for insurance claim an undesired event (i.e. home damage due to a disaster, etc.):
- Take photos of the damaged items (for event caused by a disaster);
- List down the damaged items;
- Contact the insurer to lodge a claim;
- Check with the insurer validate and confirm the claim prior to any repair; and
- Start the remedy work.
It is advisable to submit the insurance claim at the early stage soon after the undesired event. This is to avoid any prejudice on the claim as the delay in submitting the claim it may cause suspicious impression and may further delay the claim process
Submit claim to the insurer with:
- Details of the incident;
- Details of the damage; and
- Supporting information & documentation (i.e. police report, etc.)
If there is a damage of the electrical appliances, submit repair bills for reimbursement.
If it is required to do immediate repair, such as replacing the front door to prevent further break-ins, one should ensure that these are carried out immediately and the receipts are kept as part of the claim.
If major repairs are required, such as rebuilding the wall or the rooftop, one should obtain estimated cost for the repair and obtain the consensus/approval from the insurer before commencing with repairs.
What is the risk of under-insured?
Being under-insured can be extremely costly and stressful if one loses his/her home. One is considered to be under-insured if his/her insurance coverage is less than 90% of the rebuilding costs in the event of loss or damage.
One can also be under-insured for his/her home contents if he/she does not have enough home contents insurance to replace the things, especially the jewelries and expensive collections.
For example:
If on paper, the total cost to rebuild a house = RM 500,000
And, the sum insured under the insurance policy = RM 400,000
During an undesired event (e.g. house fire), the incurred loss = RM 100,000
When submitting the claim, the reimbursable sum from the insurer = RM 400,000/RM 500,000 x RM 100,000 = RM 80,000
Hence, the home owner will have to bear the difference of RM 20,000 from his/her own pocket.
Ensure that the property is adequately insured at all times, and include the cost of renovations and enhancements made to the property. Check that there is adequate coverage each year when renewing the insurance policy or changing insurers.
Assess and decide on the insurance premium wisely
Do not include everything that is not necessary - Check carefully the insured list to exclude any unnecessary items from the coverage. For example, it may be required to insure a 10-year-old toaster washing machine as it is may be a low-value item at a depreciated rate.
Install safety equipment - The insurance premium can be lower if the house is equipment with safety measures, such fire alarm(s), portable fire extinguisher(s), etc.
Avoid unnecessary add-ons - Owner should evaluate the add-ons carefully to only insure what is need instead of taking the additional coverage just because it is there. For example, add-ons l such as loss of rent will only increase your premium.
It is advisable to check the insurance coverage carefully before committing to the policy and to consider having the home insured against natural disasters. Always compare the policies and premiums from a few insurers before choosing the best one that suits the needs.
It is a misconception to think that insurance coverage is not required at all if one stay in a rented property as the property may be belong to the landlord but the contents inside the property belongs to the tenant. Hence, one (as the tenant) may need insurance against any damage to the contents.
If one stay in an apartment or condominium, the building management usually gets the building insured and factors it into the monthly charges payable by the residents.
However, it is advisable that the owner should get a copy of the individual insurance certificate to check the coverage taken up under the master policy by the condominium management.
