Fire Insurance Policy Info That You May Not Be Aware

[Misc100 2]

I called up my fire insurance insurer today.

Was rather surprised to get this info:

1. The fire insurance is actually taken by the mortgage loan bank, but the owner of the house has to pay from the 2nd year onwards (the 1st year is free).

However, the beneficiary is the bank. If in the case of fire, and the owner is not able to pay the mortgage loan, the bank can claim from this fire insurance policy. The insurer will claim back from owner later on. The only thing that the owner can claim from this policy is Contents (which is a giveaway from the insurer - only max $10000).

2. The owner cannot cancel this policy as long as the mortgage loan is outstanding.

3. If the owner wish to change insurer, the owner has to pay the bank $200 annual fees to the bank every year.

4. In the event of fire, and the owner has to do extensive replacement/renovation to the unit, the owner cannot claim from this fire insurance policy. I was advised to take up an additional fire/home insurance policy (can be from any insurer), if I need this to be insured.

[gimz63251073 0]

I called up my fire insurance insurer today.

Was rather surprised to get this info:

1. The fire insurance is actually taken by the mortgage loan bank, but the owner of the house has to pay from the 2nd year onwards (the 1st year is free).

However, the beneficiary is the bank. If in the case of fire, and the owner is not able to pay the mortgage loan, the bank can claim from this fire insurance policy. The insurer will claim back from owner later on. The only thing that the owner can claim from this policy is Contents (which is a giveaway from the insurer - only max $10000).

2. The owner cannot cancel this policy as long as the mortgage loan is outstanding.

3. If the owner wish to change insurer, the owner has to pay the bank $200 annual fees to the bank every year.

4. In the event of fire, and the owner has to do extensive replacement/renovation to the unit, the owner cannot claim from this fire insurance policy. I was advised to take up an additional fire/home insurance policy (can be from any insurer), if I need this to be insured.

i believe that even if contents are insured, u will get very little payout.

firstly, insurer will ask u to support your claim with receipts - (in the event house is on fire, receipts will be long gone)

secondly, im pretty sure they take into account depreciation of furniture. After a few years, the value might be pathetic.

hence, it would appear that taking insurance will give an illusion of being covered but in reality, the coverage might be extremely low. Hence, might not be worth it?

[bepgof 20]

Clever man.

i believe that even if contents are insured, u will get very little payout.

firstly, insurer will ask u to support your claim with receipts - (in the event house is on fire, receipts will be long gone)

secondly, im pretty sure they take into account depreciation of furniture. After a few years, the value might be pathetic.

hence, it would appear that taking insurance will give an illusion of being covered but in reality, the coverage might be extremely low. Hence, might not be worth it?

Edited February 22, 2011 by bepgof

[Misc100 2]

My mortgage loan is with OCBC and the fire insurance is by OAC (arranged by OCBC as it is a subsidiary of OCBC). The policy is known as Mortgage Interest Policy,

I have spoken at length with both parties.

This is what the policy does:

When there is a fire in my unit, and I need renovations to redo the house, I cannot claim from this policy.

It is during the months when the unit cannot be stayed that OCBC will claim from this policy the equivalent amount of mortgage loan. The polcy will not claim back from me.

So basically I do not have a fire insurance policy although it is given free by the bank for 1st year and mandatory for subsequent years (payment to be made by me).

I have been advised to get an 'additional' fire insurance policy myself.

[gimz63251073 0]

My mortgage loan is with OCBC and the fire insurance is by OAC (arranged by OCBC as it is a subsidiary of OCBC). The policy is known as Mortgage Interest Policy,

I have spoken at length with both parties.

This is what the policy does:

When there is a fire in my unit, and I need renovations to redo the house, I cannot claim from this policy.

It is during the months when the unit cannot be stayed that OCBC will claim from this policy the equivalent amount of mortgage loan. The polcy will not claim back from me.

So basically I do not have a fire insurance policy although it is given free by the bank for 1st year and mandatory for subsequent years (payment to be made by me).

I have been advised to get an 'additional' fire insurance policy myself.

Hi, if i understand u correctly, the insurance covers only mortgage payment for periods where the house cannot be stayed in due to renovations. Also, the insurance is compulsary.

It does not cover anything else and there is a $200 annual charge should you change insurer.

Im not familiar with the market rates for fire insurance, but with such a punitive term, u should re-consider the insurer company or look around for comparative deals...

In any case, probability of fire in homes is very low if your electrical works are properly done and do not have children who play with fire. My friend had his HDB burnt till chao tar due to a naughty child years ago. Sad...

[Misc100 2]

Hi, if i understand u correctly, the insurance covers only mortgage payment for periods where the house cannot be stayed in due to renovations. Also, the insurance is compulsary.

It does not cover anything else and there is a $200 annual charge should you change insurer.

Im not familiar with the market rates for fire insurance, but with such a punitive term, u should re-consider the insurer company or look around for comparative deals...

In any case, probability of fire in homes is very low if your electrical works are properly done and do not have children who play with fire. My friend had his HDB burnt till chao tar due to a naughty child years ago. Sad...

as long as i have the mortgage loan, i cannot cancel this policy, else there is admin fees of $200 per annum

however, i can get another fire insurance on top of it

contents insurance is impt...eg tv fridge replacement if there is fire

[wolflet 1]

thats called home contents insurance. basic home insurance provided by hdb only cover the structure. as long as structure not damaged, no payout. so to protect your home contents, u need another home contents insurance available at most insurers

[KelvinY 0]

Home insurance is pretty cheap - had a quick look at NTUC's HDB Home Insurance (http://www.income.com.sg/insurance/home/hdbflats.asp) covering Reno & Contents (but not the building itself which is under the Bank insurance?) was only <$80 per year. Other insurers I suppose would be similarly priced. So I guess its quite easy to get additional cover without having to cancel the bank fire insurance policy.

[binng22 0]

get a home content insurance on top of your existing fire insurance...

[sixxee7 0]

wow thanks for the great info!

[getzski 1]

get a home content insurance on top of your existing fire insurance...

yup. i recently got a 40K(immbobile furnishing) + 20k(movable contents) insurance for about $80 a yr. even include windows payout not matter how the windows are broken.

[binchotan 0]

yup. i recently got a 40K(immbobile furnishing) + 20k(movable contents) insurance for about $80 a yr. even include windows payout not matter how the windows are broken.

which insurance company did you buy from?

[sleaf 0]

Does it mean that in the case of house burnt down by the fire, the house owner can't claim back from the insurer what he/she has paid up for the house?

<!--quoteo(post=613382:date=Feb 24 2011, 03:12 PM:name=Misc100)--><div class='quotetop'>QUOTE (Misc100 @ Feb 24 2011, 03:12 PM) <a href="index.php?act=findpost&pid=613382"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->My mortgage loan is with OCBC and the fire insurance is by OAC (arranged by OCBC as it is a subsidiary of OCBC). The policy is known as Mortgage Interest Policy,

I have spoken at length with both parties.

This is what the policy does:

When there is a fire in my unit, and I need renovations to redo the house, I cannot claim from this policy.

It is during the months when the unit cannot be stayed that OCBC will claim from this policy the equivalent amount of mortgage loan. The polcy will not claim back from me.

So basically I do not have a fire insurance policy although it is given free by the bank for 1st year and mandatory for subsequent years (payment to be made by me).

I have been advised to get an 'additional' fire insurance policy myself.<!--QuoteEnd--></div><!--QuoteEEnd-->

Hi, if i understand u correctly, the insurance covers only mortgage payment for periods where the house cannot be stayed in due to renovations. Also, the insurance is compulsary.

It does not cover anything else and there is a $200 annual charge should you change insurer.

Im not familiar with the market rates for fire insurance, but with such a punitive term, u should re-consider the insurer company or look around for comparative deals...

In any case, probability of fire in homes is very low if your electrical works are properly done and do not have children who play with fire. My friend had his HDB burnt till chao tar due to a naughty child years ago. Sad...

[Judii 0]

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