Whether you own your home or you’re renting, home contents insurance provides peace of mind and financial protection for your most valued possessions. Read on to find out what to look out for in a policy and what you’ll be covered for.
What is home contents insurance?
Home contents insurance covers the cost of repairing or replacing your possessions when they are stolen or damaged due to an insured event. It covers everything from furniture and appliances to clothing, jewellery and even your
money kept within the home. This type of home insurance offers financial protection if any of your items are damaged due to fire, storm, flood, theft and a wide range of other risks.
There are two main types of home contents insurance policies available:
Replacement-value. Replacement-value policies only cover your possessions for their current market value, and most items depreciate in value each year. As an example, while your big-screen TV might have been worth S$8,000 when you bought it a few years back, if it is destroyed by an insured event and you make a claim, the benefit you receive will reflect its current value, which will most likely be a whole lot less than its purchase price.
New-for-old. New-for-old policies cover the cost of replacing stolen or damaged items with new equivalent items. This type of policy provides a higher level of protection and therefore tends to be more expensive than replacement-value contents insurance. However, it is now much more common than replacement-value cover.
Contents insurance is designed to cover damage to, or loss of, the contents of your home. This includes cover for a wide range of items, such as:
- Carpets and curtains
- Furniture and furnishings
- Household goods and appliances
- Clothing and personal effects
- Sporting equipment
- Portable electrical equipment
The best policies will cover your personal possessions against a wide range of events, including:
- Storm, hail and lightning
- Vandalism or malicious damage
- Sudden impact
- Accidental glass breakage
- Accidental damage (sometimes available as an option)
- Flood (sometimes available as an option)
- Water from leaking pipes
Finally, home contents insurance also offers a range of additional benefits:
- Legal liability cover if you’re held responsible when someone else suffers an injury or property damage
- Replacement of locks and keys after theft
- Cover for credit card fraud resulting from the loss or theft of credit cards
- Cover for contents kept in the open air at your home
- Cover for contents belonging to guests
- Cover for contents temporarily removed from your insured address
- Food spoilage costs
- Emergency repairs to your building to prevent further damage to your contents
- Cover for portable valuables while they’re away from home
Yes, home contents insurance can provide cover for your personal valuables, including items such as jewellery, smartphones, computers, cameras and more. However, it’s important to be aware of any limits that apply to cover – for example, your laptop may be worth S$4,000, but your insurer may only pay a maximum benefit of S$2,000 for any one item.
Keep an eye out for portable valuables or portable contents insurance, which is included as standard on some policies but available as an extra-cost option on others. This provides cover for those important items you often take with you when you leave home.
Contents insurance for phones
If you’re looking for cover for your smartphone, computer, camera or other important electrical items, look for a policy that provides cover for portable contents. This ensures that those gadgets you take with you anywhere you go are covered at home and away from home, providing cover for theft and accidental loss and damage.
If you need to put some or all of your contents into a storage facility for a few months or longer, the good news is that many home contents insurance policies will provide cover for your possessions while in storage. This means you’ll be protected if your belongings suffer loss or damage due to any insured event, for example fire, storm, theft and flood.
However, terms and conditions apply. For example, your belongings may need to be stowed in a lockable and fully enclosed storage unit that is located in a commercial storage facility and accessible only by you.
If you need to put stuff into storage so you can renovate, downsize or just find some extra space at home, contact your insurer to find out whether they’ll cover you.
When comparing policies, keep an eye out for the following features:
- Cover that’s right for you. Does the policy provide protection against all the risks that may cause damage to your contents? For example, if you live in an earthquake-prone area, is earthquake cover included? If you own a number of expensive jewellery pieces, are they covered by the policy?
- Flexibility. Can you tailor cover to suit your unique needs? For example, can you exclude any extra-cost covers you don’t need, or increase your excess in return for a lower premium?
- New-for-old cover. Policies that provide new-for-old cover are more expensive than policies that cover the current value of your items, but this is because they offer a higher level of cover.
- Accidental damage cover. Check whether the policy covers you for accidental damage to your contents, for example if you accidentally break your TV. Having this benefit included in your policy can provide greater peace of mind at home.
- Personal valuables cover. Some insurers will also offer the option of protecting personal valuables when they’re away from home. This includes items like cameras, mobile phones and jewellery; so it’s worth checking if this optional extra is available should you need it.
- Efficient claims service. Check to see how quick and easy it is to make a claim with the insurer? Does the provider have a good reputation for paying out successful claims promptly and without any hassle?
The right level of cover depends on a few important factors:
- Your possessions. What contents to you want to insure? How much are they worth?
- Your budget. How much can you afford to pay for cover?
- Your risk tolerance. Do you want comprehensive cover against a broad range of risks, or would you prefer a cheaper policy that only offers essential protection?
To help work out exactly how much cover you need, it’s often helpful to create a checklist of all the items you want to protect. Go through your house one room at a time and make a list of all the important belongings you need to insure. For example, in a living room this list might include:
- Coffee table
- Desktop computer
- Dressing table
- Bedroom furniture
By listing all the items you want to cover and tallying up their combined value, you’ll gain a much clearer idea of how much your contents are worth. Then you can think about how you would afford to replace them if disaster struck; for example if you lost everything in a fire. Planning for this sort of worst-case scenario will help you work out exactly how much home contents insurance is enough.
It can be easy to end up with contents insurance without really thinking about the amount of money you would need to replace everything you own.
- Keep track of your belongings. It can be hard to keep track of all your belongings and remember their value, especially if you haven’t written them all down. Over the years you may have bought new valuables or received expensive gifts. If you haven’t reviewed your home contents since you first took out insurance many years ago, it might be time to take another look.
- Costs add up. Some of your old pieces of furniture might not seem that valuable any more, but if you lost them in a fire, the cost of replacing them would be huge. That old furniture you probably couldn’t sell for S$100 could cost more than S$1,000 to replace.
- Cover for all scenarios. Those small, valuable items like laptops, cameras and jewellery are at risk of theft. Thieves are not likely to steal larger items, such as fridges, curtains, washing machines and beds, but they can still be destroyed by fire or flood.
- Get an accurate estimation. You might try to estimate the total value of your possessions by doing a quick mental calculation and using that figure as your insured amount. But you’ll get a far more accurate figure if you walk through each room of your house and write a list of every valuable item you own and its value. You’ll be surprised at how much it would cost to replace everything in the event of a fire.
- Keep an inventory. An inventory could be as simple as listing all your possessions and their value. Alternatively, there are a range of inventory templates available online that you can get through insurance companies.
Remember, it’s not just the big items you need to include, such as furniture or electrical goods. Other things, like small appliances, clothing, jewellery, curtains, rugs, books, toys, kitchen items, linen, musical instruments and sports equipment, will all be expensive to replace and should be included in your estimate. And don’t forget items outside the house, such as lawnmowers or furniture.
When comparing home contents insurance, it’s also important to be aware of what a policy doesn’t cover. These are the general exclusions, and the Product Disclosure Statement (PDS) in your policy will contain a list of situations, circumstances and events where no cover will be available, such as:
- Loss or damage occurs because building work or renovations are being carried out at your home
- The loss or damage is caused by actions or movements of the sea
- Your claim arises from breaking the law
- Loss or damage is caused by a computer virus or hacking
- Your claim arises due to a deliberate action by you
- You fail to take reasonable care of your contents
- You fail to properly secure your home
- The loss or damage is caused by a mechanical or electrical breakdown
- The loss or damage is caused by wear and tear or gradual deterioration
- The loss or damage is caused by rust, rot, mould or corrosion
- You leave your home unoccupied for an extended period of time, for example 60 consecutive days or more
- It’s for consequential loss of any kind
Check the PDS for a full list of the exclusions that apply to your policy.
Want to reduce your home contents insurance premiums? There are several simple ways you can cut down on the cost of cover, such as:
- Shop around. The simplest way to find affordable cover is to compare a range of policies and quotes. Of course, remember that just because a policy offers the cheapest policy doesn’t mean it’s right for you, so check out the full cover features before choosing an insurer.
- Choose a higher excess. If your insurer offers a flexible excess, you may want to consider raising this excess in order to lower your premiums.
- Look out for discounts. Many insurers offer discounts that can help you enjoy significant savings on the cost of cover. These include bundling discounts, which you may be able to benefit from if you combine your buildings insurance and your home contents insurance together. You may also be able to save money by holding multiple policies with the same insurer, such as if your contents insurance provider also insures your car.
- Minimise claims. Making numerous claims on your policy can increase the cost of cover.
- Don’t buy cover you don’t need. Before you start shopping for a policy, take some time to think about how much cover you need and what risks you need to be protected against. You will then be able to choose a level of cover that’s adequate for your requirements, and can avoid adding unnecessary extra-cost options to your policy.
- Review your policy regularly. The contents of your home are always being changed, updated and upgraded, and so too are the policy options offered by Singaporean insurers. With this in mind, it’s a good idea to regularly review your policy and work out whether you may be able to get a better deal somewhere else.
If you’re renting a home, you don’t need to worry about insurance cover for the actual building you live in – that’s the landlord’s responsibility. However, you do need to worry about insurance cover for all your stuff inside the house, like your furniture, electrical appliances, clothing and more.
You may be able to find Singaporean insurers which offer specific contents-only insurance policies designed to suit the cover needs of renters. These policies can protect your belongings against loss or damage caused by a wide range of risks, including fire, theft, storm, vandalism, accidental damage and even flood. There’s also cover for your legal liability if someone suffers an injury at your home.
As a landlord, you might be wondering whether you need any cover for your investment property. Sure, home insurance is essential to cover the building itself and any permanent fixtures, but what benefits does home contents insurance offer for a landlord?
Well, it can cover all the items you own at the property, including:
- Carpets and rugs
- Electrical appliances
- Portable household items
- Curtains and blinds
It provides protection against loss or damage due to fire, storm, theft, vandalism, flood and a wide range of other insured events, while also covering theft or malicious damage caused by tenants. Combined with all the usual benefits that home insurance has to offer, not to mention protection against loss of rental income caused by a range of events, the purpose of comprehensive landlord insurance becomes clearer.
How can I make sure I’m buying the best home contents insurance policy for me?
There’s a lot to consider when choosing home contents insurance and the whole process can start to seem a little daunting. To make things easier and help you find the best home insurance policy for your needs, remember the following tips:
- Don’t underestimate the sum insured. Don’t try and save a couple of bucks on your premium by dropping your sum insured too low. Make sure the level of cover you choose would be sufficient to completely replace your home if it was completely destroyed. Also check that the policy automatically increases your sum insured each year so that it keeps pace with inflation.
- Choose an affordable excess. Most insurers allow you to vary your excess when you apply for cover – the higher the excess you choose, the cheaper your premium. Just make sure you can afford to pay that excess if you need to make a claim.
- Consider accidental damage cover. Most policies cover defined events cover only and provide accidental damage cover as an optional extra. But it’s an option that’s well worth considering – take a moment to think about all the costly accidents that’ve occurred at your home over the years when deciding whether it’s worth the extra expense.
- Check cover limits. Make sure the policy provides sufficient cover for your valuable items by checking the PDS for cover limits and sub-limits. For example, if your S$5,000 computer is destroyed by fire and your policy limits computer cover to a maximum of $2,500, you’ll end up significantly out of pocket.
- Check the exclusions. Not only is it important to know what your policy covers, but also what it doesn’t cover. Read the list of general exclusions in the PDS so you’re fully aware of those situations and events when your insurer won’t pay claims.
- Compare! The only way to find the best home insurance policy for you is to compare multiple policies. In the digital world this really is easy to do, so compare quotes, cover features, limits and exclusions to work out which policy stands head and shoulders above the competition.
Many people take a ‘set and forget’ approach to home contents insurance. Sure, they might do a thorough comparison the first time they buy cover, but once they’ve chosen an insurer they tend to simply pay their policy renewals each and every year without searching for a better deal.
But this can be a costly mistake for two reasons:
- You could be paying too much for cover. Don’t assume that just because you’re a long-term customer your insurer will offer you the best possible price. You may be able to access an equivalent level of cover from another insurer but at a much lower price.
- There could be a better policy out there. Your home insurance policy might have met your needs 5 or 10 years ago when you last compared cover, but there’s every chance your cover needs will have changed since then. There may also be different policies and cover feature available in today’s insurance market, so shopping around could help you find cover that’s better tailored to your requirements.
So when your next home contents insurance renewal appears in your letterbox or email inbox, don’t just pay the premium quoted to you straight away. Take some time to compare quotes from a few other insurers to see if there’s a better deal out there. Switching home contents insurers can be quick and easy, and it can make a surprisingly big difference to your bank balance as well.