Insurance for Fire, Floods, and the Weather

With the extensive rain seen by Hong Kong over the past few months, its likely that your home is feeling a bit damp. Rain and the weather are a fact of life in this city, with the monsoon season running from May until the end of September and bringing an average of 250mm of rainfall per month. Add in the occasional Typhoon, and the damage caused by winds and water in the city can be a major concern if you are not adequately prepared.

While nothing is ever going to prevent a major weather event from occurring, there are avenues available to help you recover from a disaster as quickly as possible.

One of these avenues is Home Insurance.

Renter’s Insurance and Weather Protection

In Hong Kong “Renter’s Insurance” is commonly referred to as “Home Contents Insurance.” This is due to the fact that property owners will also need to protect the belongings inside their home and, as such, means that this type of insurance does not only apply to people who are renting their apartments.

Renter’s Insurance is designed to protect the things in your home – for many people this will be possessions like clothes, electronics, artworks, and jewelry. But what a lot of policyholders don’t realize is that the “things” inside your apartment or home also include fixtures, fittings, and improvements that you as the occupant have made. So, for example, something like the new sink faucet you installed which gets damaged in an electrical fire (caused by water damage from a typhoon), can be covered under a Hong Kong renter’s insurance policy; providing you with the financial support to obtain a replacement or repair the fitting.

But further to this, under a Renters insurance policy in Hong Kong, your personal possessions can be covered on a worldwide all risks basis. This means that, no matter how your prized belongings are damaged, in most cases (unless the risk is specifically excluded from the policy) you are able to submit a claim to the insurance company on that item and have financial assistance in overcoming the loss.

So, if you have a collection of artworks that is covered under a renters insurance policy in Hong Kong and one of your pieces is damaged in a storm due (a window was left open and debris blown by the wind caused a gaping tear to appear in the canvas), you would receive money to either purchase a replacement or have the artwork fixed. If the art was damaged because of a fire (caused by a typhoon flooding a power transformer near your ground floor flat), again, you would be covered due to the fact that this type of protection is offered on a worldwide all risks basis.

One important caveat here is that there will normally be an overall limit applied on many standard Hong Kong Home Contents insurance products – with sub-limits applied to individual or unspecified items. This means that for expensive or valuable belongings, a standard renters insurance policy may not fully cover you; in the event of a loss, you would be left covering any shortfall out of your own pocket. As such, if you have an expensive or extensive collection, of any type, it may be sensible to look at a dedicated Hong Kong Collections Insurance policy that will provide the same flexible coverage to your possessions in the event of a weather risk, but with a much higher level of protection.

Fire Insurance for Weather Risks

The obvious, and biggest risks, for severe weather are going to be those that relate to property damage. Not the damage caused to individual items inside your home, but damage and destruction to the home itself. Whether this is an apartment in a high-rise building, a condo or townhome, or even a standalone single-family property, no building is immune to the wrath of mother nature - rebuilding after a significant event can be costly and time consuming.

If you own a low floor apartment, or village house that is flooded due to storm-surge driven by a typhoon, correcting the water damage, doing mold and fungus prevention, and restoring the property to a livable condition is going to be an expensive proposition. If you are letting the property out, in addition to having to fund the repair costs, you will likely also lose out on any rental income as your tenants have to find alternative living arrangements. Likewise, if you own a high floor flat in an apartment building, or have a flat roof on your town home, you may be at risk of needing to replace your roof following months of rain if drainage maintenance has not been properly kept up.

In Hong Kong the type of insurance that supports property owners with the rebuilding and repair costs of their property after events like those illustrated here is called “Fire and Allied Perils Insurance.” Most of these plans will start out as simple Fire Insurance – only covering losses which occur from a proximate cause of fire. Fire Insurance will typically be a requirement of any mortgage application, and will need to be in place prior to the funds being released for the purchase of a property. However, for an additional premium, it is possible to include “associated risks” alongside simple fire protection – these are known as “allied perils.” As might be guessed, Allied perils in relation to fire include things like Wind, Flood, Water, Earthquakes, Landslips, and Subsidence.

By including Allied Perils protection on a fire insurance policy you are giving yourself as much coverage as possible in the face of an unforeseen weather event, and are in position to receive the support you deserve when rebuilding.

Home and Weather Insurance Advice in Hong Kong

From Event Insurance plans to Personal Accident Insurance, and even Car Insurance protection, there are myriad risks you face beyond your home when it comes to increasingly violent weather in the modern world. There is no “one size fits all” solution when it comes to insurance, whether in Hong Kong or elsewhere around the world – the coverage and mix of plans that is right for your specific and unique needs may not be a good fit for anyone else.

This means it can be difficult to know, exactly, what your best options are. Fortunately, the independent insurance brokers at CCW Global can help. Our expert advisors are obligated, under Hong Kong law, to work on your behalf, and not for the insurance companies. This means that you will always receive our honest, unbiased advice about the insurance protection that best works for you.

To learn more about property insurance and weather risks in Hong Kong, or to discover any of the other insurance products we work with, please Contact Us Today.

Ask CCW – Your Insurance; Swift, Simple, Sorted.