We’ve seen one too many shares of Facebook about parang-wielding robbers attacking people in their own homes, or stories of people’s homes ravaged by fires and floods. In the event that something like this does happen *touch wood * to your house, what can you do, and how will you be able to cut your losses?

In cases like this, home insurance is especially important, as it functions just like car or personal insurance by protecting your home and its contents from damage due to disasters or crime.

 

First, you have to make sure that your house is adequately insured at all times. You don’t want to under-insure because then you will have to bear the extra costs when rebuilding, neither do you want to over-insure and pay more than what is needed.

There are usually 3 basic types of policy when it comes to home insurance:

  • Fire Insurance
  • Houseowner Insurance
  • Householder (Content) Insurance

Most insurance providers (in Malaysia) do not cover natural disasters such as floods or earthquake as part of home insurance, although houseowners may opt to take out additional insurance for a premium. This is only a general outline of the three types of home insurance policies, as each insurance provider will have their own exclusions of what can or cannot be be claimed.

Fire Insurance
This type of policy provides you with coverage against loss or damage to insured property (including fixtures and fittings, interior decorations, walls, gates and fences) caused by fire, lightning or explosions.

Houseowner Insurance
This type of policy covers the loss or damage caused by theft, robbery, personal liability in terms of injury, and property damage.

Householder (Content) Insurance
This is a policy which covers your household contents and includes coverage for fatal injury to you as the insured. This type of insurance does not cover damage to the house itself.

Now, if you are the owner and occupant of the property, it is a must to have a complete home insurance policy to protect your home, property, family members and personal belongings. The mortgage will usually include this as a condition, so not doing so will put your mortgage at risk.

However, if you are merely renting somebody else’s property, it is the landlord’s responsibility to have a houseowner’s policy in place. You will only have to check that you have a householder (content) insurance policy to ensure your household contents are covered.

Now that you are familiar with the basic home insurance policies available, it’s time to consider which type you should get to suit you and your household needs.

References:
Insurance Info Malaysia
Kurnia Insurance Malaysia
The Money and Advice Service UK
Insurance Information Institute