Legal Tips

Home Insurance

Document Date: 14-Dec-1997

Here are some Frequently Asked Questions on the topic "Home Insurance":

1. What is the scope of cover of a home insurance policy?
2. What do the terms "building", "renovations" and "contents" refer to?
3. When must a claim under the policy be notified?
4. What is the basis of settlement of claims made under a home insurance policy?
5. Does the insured have a duty of care under the policy?
6. What are the exclusions under the policy?
7. How can the policy be cancelled?

1. What is the scope of cover of a home insurance policy?

   INCOME will indemnify an insured under a home insurance policy for:

   (a) loss or damage to the insured building as well as its renovations and contents caused by perils such as fire, lightning, thunderbolt, explosion, bursting/overflowing of domestic water tanks or pipes, impact by road vehicle or aircraft; theft by violent and forcible entry or exit, flood caused by hurricane, cyclone, typhoon, windstorm, earthquake, volcanic eruption, strike, riot, malicious act and natural catastrophes.

   (b) loss incurred in terms of rent and hotel expenses if the building is badly damaged and is rendered uninhabitable. Maximum payable - 10% of total sum insured.

   (c) loss incurred in terms of compensation payable to members of the public for injury or damage to property including legal costs incurred with INCOME's consent. Amount payable – up to $500 000 for any one occurrence.

   (d) death or total permanent disability  to the insured or his family members occurring in any location  where such injury results in  death or total permanent disability within 3 months of such  injury.
   
   Amount payable – up to $20 000 per adult, up to $10,000 per child subject to a maximum of $50,000 in the aggregate for the family.

   (e) loss or damage caused by any of the perils to clothing and personal effects (other than cash, currency notes, bank notes, and stamps) belonging to the insured's domestic servants.  Amount payable - up to $500.

   (f) costs and expenses incurred for the removal of debris following damage or destruction to the insured building or its contents. Maximum indemnity - up to 5% of sum insured on contents.

   (g) loss or damage to contents temporarily removed from the insured building but within the geographical area except property removed for sale or exhibition or to furniture depositories. Maximum payable - 15% of total sum insured on contents.

   (h) medical, surgical, hospital , nursing home and nursing fees or charges incurred as a result of the injury sustained by insured or any household member in any one accident caused by the Insured perils whilst in the Building. Amount payable - up to $1000 any one accident

   (i) Loss or thefts of any ATM/credit cards or misuse by any unauthorised person provided such losses are reported to the issuing bank/ credit card company within 24 hours of discovery of loss or theft. Amount payable: up to $1000

   (j) Cost of repair , replacement or installation of external door locks and keys, loss of domestic pet , deterioration of frozen food, accidental breakage of mirrors and fixed glass. Amount payable - up to $500 for each occurrence.

2. What do the terms "building", "renovations" and "contents" refer to?

   For HDB and HUDC flats, "building" refers to the internal building structures, fixtures and fittings based on standard specifications.

   For private flats and houses, "building" refers to building structures including garages and out buildings used in connection with it as well as walls, gates and surrounding fences.

   "Renovations" refer to the improvements, additions, fixtures and fittings that are not already present as standard specifications.

   "Contents" refer to all movable items in the building eg furniture, electrical appliances, etc.

3. When must a claim under the policy be notified?

   When a loss or damage occurs, the insured are required to submit as soon as possible on our prescribed form together with all supporting documents. If the loss or damage is by theft or attempted theft, the insured must also give immediate notice to the police.

4. What is the basis of settlement of claims made under a home insurance policy?

   Settlement is based on the cost of repair, reinstatement or replacement of the damaged or lost property. Reinstatement of damaged property is to a condition substantially the same but not better or more extensive than when it was new.

5. Does the insured have a duty of care under the policy?

   Yes, the insured must exercise reasonable diligence and care to keep the premises in a proper state of repair. Any defect must be made good as soon as possible. The insured must take necessary precautions to prevent injury, loss or damage. INCOME will not be liable for any injury, loss or damage caused by a defect which the insured has failed to remedy despite having received notice of it.

6. What are the exclusions under the policy?

   Generally, the policy does not cover the following:

   (a) any loss or damage to the building which the HDB has undertaken or is legally bound to make good at its own expense.

   (b) any loss or damage caused by war, act of terrorism, invasion, revolution , mutiny and other similar occurrences.

   (c) consequential loss or damage except for loss incurred in terms of rent and hotel expenses as mentioned in 1 (b) above.

   (d) loss or damage caused by subsidence or landslide except if brought about by earthquake or volcanic eruption.

   (e) loss or damage caused by nuclear weapons and radiation.

   (f) loss or damage to deeds, bonds, cheques, cash, coins, medals, stamps, currency notes, bank notes, manuscripts, documents of any kind, motor vehicles and its accessories as well as livestock.

   (g) liability to tenants

7. How can the policy be cancelled?

   The insured may cancel the policy at any time by notification in writing. INCOME may cancel the policy by giving 7 days notice in writing to the insured at his last known address.