The other side of home insurance: Fire Risks

On March 2 2023, a 48-story building at the site of the former mariner’s club caught fire. The 4-alarm blaze was the second time the construction site had experienced a fire issue since September 2022, when burning scaffolding forced an evacuation of workers.

The most recent fire saw burning embers drift to a nearby office building and hotel – causing secondary fires and prompting the evacuation of roughly 170 residents at 1.46am.

While the cause of the fire is still being investigated the government is taking steps to ensure the safety of the building, specifically looking at fall risk of the external façade, and the construction machinery still located at the site. However, it has been highlighted that as the building was still under construction the safety equipment was not fully installed, and that only “some temporary fire safety” devices were present at the time of the blaze. In addition to this, the obstructions caused by building materials and machinery impeded the efforts of fire fighters in containing the inferno.

Fires of this magnitude are rare in Hong Kong, and the fact that it was an empty, still under construction building worked to mitigate much of the potential damage. However, the blaze that lit up the Tsim Sha Tsui skyline last week is a stark reminder that fires can happen, and you need to be prepared.

Fire and Allied Perils Insurance

If you own property in Hong Kong it is extremely likely that your bank would have required you to obtain Fire insurance when taking out your mortgage. This is because Fire insurance is designed to provide financial assistance with the rebuilding costs of your home should you experience a fire.

If you have a mortgage, and a fire burns down your flat, then the existence of a fire insurance policy ensures that the bank is protected from a full loss. In fact, while Fire insurance is designed to only cover the rebuilding costs of a property after a covered loss many banks providing mortgages will require that the policyholder insures their property for the full outstanding amount of the mortgage.

It is important to understand that a Fire Insurance policy will, generally, only protect a property against losses caused by fire. If the proximate cause is anything other than just “fire” then a simple fire insurance policy will not provide any claims settlements. Because of this many Hong Kong Insurance companies offer Allied, or “Extra” perils cover under Property All Risks products.

Property All Risks Protection

All building and home owners in Hong Kong will normally hold a Fire Insurance policy. This is usually due to the fact that Fire Insurance, as previously stated, is required by the bank in order to successfully obtain a mortgage. However, despite the risk of lithium ion batteries, or Christmas tree lights, or any of the other common fire hazards around your home, in Hong Kong you are more likely to encounter a property loss from weather unrelated to fire.

But, getting coverage for the more common “extra” perils is normally at a higher cost. Choosing to obtain a property insurance coverage with additional levels of protection will be more expensive that simply purchasing a fire insurance plan, and it is for this reason that many property owners in Hong Kong may not have the coverage they want in the event of a worst-case scenario.

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If you would like to learn more about Home, Property, or Fire Insurance in Hong Kong, or if you would like to learn about our Home Insurance Quotes, please Contact Us to speak to an expert broker today.

All our quotes are provided on a no-cost, no-obligation basis, and we work to ensure that you only pay for the protection that you need.

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