Home Insurance, or Houseowner / Householder Insurance as it is also known, is one of the most important insurance policies you can buy in your adult life. Your home is one of the largest financial investments you've made, and that’s why it’s so important to protect it.
 
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  Insured value  
 
Make sure that your property is adequately insured at all times, and include the cost of renovations and enhancements made to your property.

The sum insured should cover the cost of rebuilding your property in the event of loss or damage.
 
 
     
  If your home is under financing, make sure that your financier has taken adequate coverage. Usually, the coverage taken by the financier will be for the amount of the loan taken.

You may want to take up a separate insurance to extend the coverage taken by your financier.
 
     
  Average Condition  
  If the amount insured is less than the rebuilding cost (i.e. under-insurance), you are deemed to be self insuring the difference. The average condition will apply in the event of a claim. For instance, total cost for rebuilding a house is RM100,000, the sum insured is RM80,000 and the loss is RM5,000. The average condition will be as follows:  
   
   
  In the example above, the insurance company will only pay RM4,000 instead of RM5,000 for the loss. You have to bear the difference of RM1,000.  
   
  Payment of Premium  
  Your premium must be paid and received by your insurance company within 60 days from the inception date of the cover, otherwise the cover is automatically cancelled and you will still be responsible to pay the proportion of premium for the 60 days.

It is advisable that you pay the premium directly to the insurance company, either by cash, credit card or cheque. Should you decide to pay the premium through your agent, ensure your cheque is made payable only in the name of the insurance company.

Insist on a receipt for the premium paid to your insurance agent or insurance company. Contact your insurance company if you have not received the policy after one month of purchase.
 
 
     
 
Basis of compensation
You should decide on the basis of compensation of your householders policy, whether it is on reinstatement or replacement value. You will be compensated with the value of a brand new item under reinstatement basis but on the depreciated value of item lost under replacement basis.
 
Specific declaration of each item
You must specifically declare each item to be insured under the policy to ensure that you get the full compensation in the event of loss/damage. It is advisable to also keep receipts of items insured, if available.
 
Duty of disclosure
You should disclose fully all material facts in the proposal form. When in doubt as to whether a fact is relevant or not, it is best to ask your insurance company or agent. If you fail to disclose any material fact, your insurance company may refuse to pay your claim.
Price
The price you pay for your property insurance will depend on the type of policy selected, the type of building and construction materials used. The insurance premium charged by your insurance company is the standard minimum rate in accordance with the Fire Tariff.
 
 
     
 
 
  The table below shows the main perils covered as well as exclusions under the three insurance policies: Basic fire policy, houseowners policy and householders policy.  
 
Cover \ Types
Fire
Houseowner
Householder
Fire, lightning and explosion caused by gas used for domestic purposes
YES
YES
YES
Loss/damage caused by aircraft, explosion (other than gas used for domestic purposes), road vehicles or animals, bursting or overflowing of water tanks or pipes, electrical installations, windstorm, tempest, earthquake, volcanic eruption and flood
NO*
YES
YES
Theft with violent/forcible entry or exit
NO
YES
YES
Loss of rental
NO*
YES
YES
Liability to third parties for
accidents in your property
NO
YES
YES
Compensation for death of insured
NO
NO
YES
Subsidence and landslip
NO*
NO*
NO*
Riot, strike and malicious damage
NO*
NO*
NO*
 
     
  * Some of the exclusions can be covered under your policy with payment of additional premiums. Check with your insurance company about these extensions.  
     
 
 
 
  Write to your insurance company with full details about the incident and damage to your home, as soon as possible.  
  Early notification is required to avoid any prejudice to your claim. Your insurance company will be suspicious if you take your time in reporting your loss, and your claims will be held up until an investigation is concluded.  
  Your must prevent further loss or worsening of the situation.  
  If you need to make temporary repairs to stop further damage (i.e. replacing the front door and lock to prevent further break-ins), you should ensure that these are carried out immediately and the bills of work carried out kept as part of your claim.  
  If the repairs required are of a permanent nature (i.e. rebuilding the ceiling after it collapses), you should obtain estimates of the repairs required and send them to your insurance company for approval before commencing with repairs.  
     
 
     
 
 
  Your must submit your claim with all supporting information and documents to your insurance company.
 
  You should cooperate fully with the adjusters/investigators appointed by your insurance company to assess your claim  
 
     
     
  The compensation amount depends on the basis of the cover:  
     
 

Indemnity basis
Will pay the cost of repairing the damaged building less the amount for wear, tear and depreciation; or

Reinstatement value basis
Will compensate the full cost of repairing the damage building without any deductions being made for wear, tear or depreciation, provided that the sum covered is adequate to cover the total cost of reinstating the building
 
     
  In the absence of any special provision, the cover will be on indemnity basis. If you want to be covered on reinstatement basis, your policy should have the relevant clause attached to it.

Excesses, being the amount you have to bear before your insurance company indemnifies you, are applicable for certain perils, such as overflowing of domestic water tanks, windstorm, earthquake and flood claims.
 
   
 
 
 
 
  Download
here
To gain a better understanding of your houseowner or householder insurance policy, download our booklet or visit our FAQ section on home insurance. You may also contact an insurance company of your choice for further explanation.