For tenants’ peace of mind: home insurance
Home insurance is not only important during typhoon season. Burglary, burst pipes and more can happen year-round. So for safety’s sake, buying a home insurance policy is essential for both owners and tenants.
Housing, a topic that’s never far from the average Hong Konger’s mind. Some people like to rent; since the landlord is normally responsible for providing certain appliances, home maintenance, rates, management fees and more, the perception is that the tenant is spared a lot of expenses and hassle. But does that mean buying home insurance is strictly the landlord’s responsibility? As we all know, accidents are just as likely to happen at home as elsewhere. That’s where home insurance comes in. A comprehensive home insurance policy will generally cover furniture, personal belongings, home appliances, losses resulting from renovation, etc., protecting the tenant against the financial consequences of a household mishap. The following two cases show why acquiring home insurance is something a tenant should not overlook.
Scenario 1: Coming Home to a Flood
Jaslin is a fashionista, and has an extensive collection of designer fashion and handbags. One day, Jaslin came home to find that a water pipe in the kitchen had burst and flooded the living room. The handbags she kept in a floor cabinet had all been ruined. Fortunately, she had always been mindful of the valuables she had at home and had previously taken out a home insurance policy with a higher maximum sum insured. After making an estimate of the losses incurred, the insurance company found that most of Jaslin’s household contents were covered by her policy, including the water-damaged handbags. Even though her policy did not cover each handbag’s full purchase price, it did protect her from more substantial losses.
| Losses | Home insurance coverage |
| 5 designer handbags, damaged by water | Household contents, lost or damaged |
| Living room furniture, damaged by water | Household contents, lost or damaged |
| Floorboards damaged, requiring renovation | Fittings and fixtures that belong to the landlord and that are not specified as the tenant’s responsibility in the tenancy agreement are generally not covered by the tenant’s home insurance |
| Rent for temporary accommodation during renovation | Cost of alternative accommodation |
| Household contents that have not been damaged by water and require temporary storage during renovation | Temporary storage protection If a residence or its contents are lost or damaged in a household accident, thus rendering the residence uninhabitable, the cost of temporary storage of furniture and other items will be reimbursed under the policy up to the maximum sum insured |
Scenario 2: Nobody Home but a Burglar
Florence spends her Christmas holiday overseas every year. Her last Christmas trip, though, was one she’d rather forget. First, she fell victim to a pickpocket on a train. Then she came home to find that her apartment had been broken into, and the burglar had made away with many valuables. Her misfortune was further compounded by the fact that the digital camera she’d bought on her trip was damaged during shipment.
Luckily, Florence was also protected by home insurance. Thanks to her policy’s Worldwide ‘All Risks’ coverage, she was reimbursed for the wallet she’d lost on her trip (including her identity card and driver’s licence), the door lock that was installed by her and broken by the burglar, the household contents that were stolen, and the digital camera that was damaged in transit.
| Losses | Home insurance coverage |
| Wallet stolen during the trip | Worldwide All-Risks Insurance |
| The cost of replacing the ID card and driver’s licence in the stolen wallet | Worldwide All-Risks Insurance |
| Replacing the door lock that was damaged in the burglary | Loss of/damage to household belongings |
| Valuables and personal belongings stolen from the residence | Loss of/damage to household belongings |
| The digital camera that was damaged during shipment | Worldwide All-Risks Insurance, covering the accidental loss of/damage to newly purchased goods in transit to your home |
On top of that, since her policy included a Christmas and Chinese New Year Increment, she also received an additional 50% of the maximum sum insured, which helped keep her losses to a minimum. Most importantly, her policy gave her access to a 24-hour emergency assistance hotline, which helped her find a solution to her most pressing problem – arranging for a locksmith to replace her door locks and keys immediately.
Most household contents in a home belong to the resident. Whether you live in a rented or self-owned property, it’s a good idea to protect your personal belongings against the unexpected. The scope of coverage varies from policy to policy, but typically, personal belongings kept inside a home, furniture, appliances and door locks are all included in standard home insurance coverage. Make sure you fully understand all the clauses and provisions before you take up a policy, or you might not get the necessary protection just when you need it most.