A mama shares why renters insurance is vital for families in Singapore, where it can be the difference between losing all your worldly possessions or recovering them
Earlier this year, on a particularly stormy night, an expat family woke up to their roof having caved in. This resulted in flooding throughout the whole house, a caved-in ceiling, broken bed, damaged electronics, files destroyed, and an unpleasant morning in sunny Singapore. The wife, a resourceful expat lady, reached out to her friends online seeking advice on landlord liability, compensation, and provisions for temporary accommodation while they sorted out the situation. Unfortunately, she did not have home contents (also known as renters insurance or tenants insurance) for their belongings.
Amongst the myriad of checklists involved in an international move, property insurance can sometimes become a forgotten footnote. Prior to moving, if an individual or a family owned real estate, the bank or a mortgage company may have insisted on property insurance as one of the terms for the mortgage. It may have been mandated and just another pile of paper amongst the mountains one would have had to sign throughout the process.
However, as many families here can relate, once that notice to relocate has been finalised, boxes packed up and shipped, goodbye parties held, and the plane lands at Changi, a fresh start awaits. So another mountainous pile of paper gets signed and sealed, and we happily move into our new host country and home. This time, personal property and liability insurance are optional, especially in a rented home.
In hindsight, insurance was always a good idea because it only came to mind after having suffered a loss. However, it may be a good idea going forward as well. The cost is quite low (usually about $300-$500 per year, ballpark, but generally less than the cost of a cup of coffee per day), and it actually can cover a lot more than just the sum of all the contents in your home. The policy would likely include personal liability for the rented unit and legal liability in the event the individual is personally sued. The policy would also provide temporary accommodations in the event of a covered loss, up to specified limits.
A quick Internet search brings up a variety of insurance providers and their brand of jargon such as “insured perils”, “indemnity”, “exclusions”, “endorsements”, “et cetera”. But the process to acquire such coverage is actually easy and pain free.
Firstly, determine if the standard limits provided in a package are sufficient. For example, is $100,000 SGD enough to replace all your contents in the event of a fire? Are there special artefacts such as art pieces, antiques, or jewellery, which would require special handling and exceed the allowed limit? If so, these may need to be appraised and insured separately.
Pay attention to what may be considered a covered loss. Some policies provide all perils coverage with few exclusions. Some may only cover specified events, in that instance, whether you live in a landed property or a condominium would likely be a factor to consider. Sewer backup and damage to roof or windows can be more common in a landed house. Keep in mind, whatever insurance the landlord may have, that will only cover his or her interest in the property, and is unlikely to provide coverage for tenants’ property or needs.
Do consider the temporary accommodations limits. Rent, as we’ve come to learn, is not cheap in Singapore; and any temporary housing you come across would have to fit in with your family’s needs and lifestyle. It would be unrealistic for a family of four plus pet to squeeze into a 1-bedroom hotel even if it’s just for a few weeks. The limitations can be based on monetary value and/or time limit. Typically, upgrades in policy limits bear a nominal surcharge.
If you have a car, some insurers may offer discounts for purchasing both home and auto insurance together. This can help save on the premium amounts. Also, in the event that a loss involves your car and contents such as property stolen from your vehicle, dealing with just one insurer would be highly preferable. This may also save on any applicable deductible amount. A deductible is threshold of loss suffered before coverage kicks in. That is, if you have suffered a loss due to an insured event, and this was valued at $500 and your policy deductible is $200, the insurance company would only pay the $300 difference.
Reviews on a particular insurer’s claim handling process are also worth looking into. After all, the policy is just another document until a loss arises and you need them to stand behind that promised peace of mind.
This expat gig comes with enough variables, uncertainties, and changes as it is, but when it comes to home and contents insurance, a small fee for peace of mind actually sounds like a solid solution to some of those curve balls that might come along.