When it comes to your home insurance, make sure all the bases are covered

PUBLISHED : Monday, 02 January, 2012, 12:00am
UPDATED : Monday, 02 January, 2012, 12:00am


Home insurance has evolved. Many policies now offer personal liability coverage, while others insure valuable belongings (such as cameras, laptops and jewellery) when you take them off your property. Some policies cover these items anywhere in the world.

Other common features include coverage against credit card fraud, insurance for the contents of your fridge and freezer, and access to a 24-hour assistance line to find emergency plumbers, electricians and even babysitters.

Dah Sing Insurance offers an entry-level home insurance policy that covers contents up to a total value of HK$300,000. While this might sound like a lot of money, it may not cover everything if you had to replace all of your electrical appliances, furniture, household items, clothes and possessions.

As well as having a cap on the total value of possessions insured, many policies impose a limit on the value of individual items, often of about HK$15,000 per item.

These items also often have to be listed on the policy when it is taken out. So if you want your policy to cover expensive jewellery or a top-of-the-range camera, it is important to let your insurer know.

Most home insurance policies replace items on a new-for-old basis. Some companies go a step further, with HSBC Insurance enabling people to replace electrical items with more energy efficient models.

It is important when shopping around to look at what a policy offers and ask yourself if you need it.

For example, it is pointless to pay for worldwide insurance of your possessions if you never leave Hong Kong or already have these items covered by travel insurance.

And while replacing things on a new-for-old basis may sound great, it is not much good if the items you have lost are antiques.

If you have antique furniture or jewellery that you want covered, it is important to talk to your insurer about this, so that they can be replaced on a like-for-like basis if the worst happens.

Another thing to bear in mind when shopping around for home insurance is the level of excess you are required to pay.

This is the amount of the claim that the insurer expects the policyholder to cover themselves before it steps in. Excesses typically range from HK$250 for claims involving lost or stolen items to HK$1,000 or more for larger claims involving water damage.

The excess is charged per claim, meaning that if you made three claims in a year, you would have to pay the excess three times.

Some companies offer a premium discount for people who opt for a higher excess.

For example, AXA reduces premiums by 15 per cent for customers who opt for an additional voluntary excess of HK$2,000. But people who decide to go this route need to be aware that this sum is charged on top of the standard excess. AXA charges an excess only for water damage claims. If the policyholder were claiming for this, they would have to pay the first HK$5,000 of the claim.

Finally, people must be careful that they do not inadvertently invalidate their policies.

Most insurers will not accept claims if a property is left vacant for more than 30 consecutive days, and burglary claims will be turned down if a window is left open or the front door is not locked, enabling thieves to gain access to your home.