If you are the actual owner of your home’s physical structure then you should consider the purchase of a comprehensive Fire Insurance Policy to cover the rebuilding costs of your property in the event that it is damaged due to a fire or other disaster.
Fire and Allied Perils Insurance, or "Extra" Perils, is generally taken by property owners to cover the building structure and landlord’s fixtures and fittings for loss or damage caused by a specific set of insured perils; such as by fire, water or typhoon – most insurers offer a range of specific perils that can be covered.
Most mortgagers require that fire insurance is arranged for the mortgaged property, and in general the insurers’ fire & allied perils policies are quite standard and meet most banks’ requirements.
Any property insurance will only cover loss of or damage to the insured physical property. The insurance cannot cover non-physical factors such as location and land space which influence the market price off the property. This means that fire insurance covers up to the physical rebuilding cost of the property (in the event of total loss).
However, most mortgagers do not clarify this, and will often request that the full outstanding mortgage amount is insured. It can be difficult to determine the rebuilding cost of a property without a survey (which can be expensive), and the insurers in Hong Kong will not advise on the sum to be insured. We would usually advise that the sum insured (the amount of cover on which the premium is based) should be the outstanding mortgage amount (if required by the mortgager) or the rebuilding cost of the property, whichever is greater, to ensure that your property is still covered even as the mortgage loan reduces over time.
Fire insurance can be taken for almost any type of property – it is not limited to buildings. For example, it is often taken for warehouse stock or equipment, and even home contents (although the specific home insurance packages provide more comprehensive cover).
Property ‘All Risks’ Insurance can also be taken for almost any type of insurable physical property. Rather than covering for loss or damage caused by a specific set of insured perils (as is the case for fire insurance), Property ‘All Risks’ (or “PAR”) insurance covers the insured property for any accidental physical loss or damage happening at the insured situation (the insured address/ location at which the property is kept) unless it is specifically excluded.
This is a more comprehensive way to insure your property, and the premium for Property ‘All Risks’ insurance is generally higher than for fire insurance policies. Most home insurance packages offer coverage on an ‘all-risks’ basis.
Property ‘All Risks’ Insurance can usually be taken instead of a fire insurance policy for mortgaged properties, and offers more comprehensive cover. However fire insurance is more popularly taken by property owners as the premium is lower, and the fire policy is usually sufficient to meet the mortgagers minimum requirements.
Property ‘All Risks’ Insurance is also frequently taken for property kept in storage and office contents, although office contents coverage is usually included in packages for businesses.
Depending on the insurer, the annual premium for this basic Fire Insurance cover may be calculated on the location of your home, nature of the insured property, security arrangements (if any), and the actual value of your rebuilding your property.
Please see Hong Kong Home Insurance Premiums for more information.
If you would like to receive a free quote for a Hong Kong Fire Insurance plan to cover the physical structure of your property, simply complete the short form at the top of this page and select Home Insurance from the drop down menu. Once we have received your quotation request and expert Hong Kong Insurance broker will contact you to discuss an extensive comparison of all the leading Fire Insurance plans best suited to meet your requirements.
For more information about the comprehensive Fire Insurance Quotes offered by CCW Global in Hong Kong please click Our Fire Insurance Quotation Process.
You can also speak to a CCW Insurance Broker directly by Contacting Us Today.