Know Your Stuff: Why not skimp on property insurance
After buying a new home, buyers usually have a budget for renovations as well as fixtures and furnishings, but home insurance is rarely on the list. Many may think it’s a waste of money to buy insurance, but it only takes one incident – a burst pipe, a fire, damaged or stolen furniture, or a fleeing tenant – to burn a hole in. the pocket.
According to Persatuan Insurans Am Malaysia (PIAM), property insurance comes in the form of fire, landlord and household policies (see “Types of property insurance”), covering fire as well as property damage. to the property and contents of the house.
If you live alone, it would be helpful to purchase each insurance, but it can get tricky if you are renting out your home and there is property damage. According to Metro Homes Realty Bhd Executive Director See Kok Loong, after a tenancy ends, that’s when disputes begin.
“One of the disputes relates to damage to the contents or equipment of the unit,” says See. “The landlord and tenant will argue over who should pay for the damages. Most real estate agents would take a video or photo of the contents of the unit and attach it to the tenancy agreement and inventory list.
“But normally the inventory list is not detailed enough to identify all the damage. So after one year the tenant will say the damage was already there, while the landlord could say the damage was caused by the tenant and will deduct the cost from the rental deposit. The tenant would be unhappy and this could lead to further disagreements and issues.
Seeing that this case happened more regularly, See investigated the various issues and found that property insurance, especially content insurance, could help.
“Insurance has evolved over the years. You don’t have to insure for the full value. Now there is something called the first loss, ”he says.
According to Investopedia, a first loss policy provides only partial insurance. “In the event of a claim, the policyholder undertakes to accept an amount lower than the total value of the damaged, destroyed or stolen goods. In return, the insurer undertakes not to penalize the insured for having underinsured his goods or his goods – for example, by not increasing the rates of renewal premiums, ”indicates the site.
According to See, some premiums can start from as low as RM70 per year, but he advises seeking better coverage from insurers in the market. The bottom line is knowing that the risk of damage is passed on to the insurance companies, which will give homeowners the peace of mind that their property is taken care of in the event of a serious incident on the property.
Owners of high-rise units who believe their unit is covered by the primary insurance policy under management should note that the coverage is primarily for the cost of repairs to the building and common areas and not the contents of individual units.
Homeowners and renters, who may have expensive items in the unit, may consider purchasing contents insurance in the event of damage or theft.
When it comes to making a claim, former PIAM CEO Mark Lim, who stepped down as CEO in November last year and is now in Singapore to start a consultancy firm, points out that different Insurance companies have different claims procedures, but there are general procedures that people can follow. . Lim says, “Notify your insurance company in writing with all the details as soon as possible. Prompt notification is required to avoid prejudice to your claim. You should also take the necessary steps to mitigate the loss or worsening of the situation.
“If temporary repairs are needed to stop further damage, you need to make sure that these are done immediately and that invoices for work done need to be kept as part of your claim. If the repairs required are of a permanent nature, you should obtain estimates of the repairs required and send them to your insurance company for approval before starting the repairs.
“You must submit your claim with all the information and supporting documents to your insurance company. You must fully cooperate with the experts or investigators appointed by your insurance company to assess your claim. “
Lim advises owners of the property to ensure that it is adequately insured, taking into account renovations and improvements to the property. For properties with title to co-ownership, like apartments or condominiums, it says that the board or joint management committee is required to take out a primary insurance policy and you should get a copy of your individual property certificate. to make sure it meets your requirements.
He says, “The owner’s or owner’s policy does not cover loss or damage due to subsidence, landslide, riots, strikes and malicious damage. However, you can cover these exclusions by paying additional premiums.
“Extensions are also available to cover loss of rent and liability to third parties for accidents in your home. The owner’s policy does not cover losses due to theft if there is no evidence of forced and violent entry or exit from the premises. “
If the tenant has run away, See advises making a police report, for example, if there is theft or if the tenant has left without paying rent and there is damage. You also need a stamped rental agreement, as it is considered proof to be submitted to the court in the event of a dispute. Regarding the content, all relevant documents must be available to prove that you have suffered a loss.
At the end of the day, shop around and find out exactly what each policy offers and you might find that paying a little a year will help you stay in place if something untoward happens and also keep you insured. that your savings are not affected. .
Types of property insurance
Basic fire policy (price *)
This policy covers your building and / or its contents against loss or damage caused by fire, lightning and household gas explosion. Coverage could also be extended to include special risks, with an additional premium, as noted below. Premium rates, wording, coverage, terms and conditions, including clauses and endorsements of a standard fire rate policy, are subject to the revised fire rate issued by Persatuan Insurans Am Malaysia.
However, as part of Bank Negara Malaysia’s tariff liberalization, insurers are also allowed to introduce non-tariff fire insurance products with variations in coverage, terms and conditions. Policyholders are encouraged to direct related inquiries to their agents or insurers.
Fire policies can be extended to cover the following risks with an additional premium:
• Damage to aircraft;
• Earthquake and volcanic eruption;
• Storm storm;
• Flood damage;
• Damage by impact;
• Burst or overflow of water tank devices or pipes;
• Riot strike and malicious damage;
• Clause B of the electrical installation (for commercial installations and machines);
• Bush fire / lallang;
• Land subsidence and landslide;
• Spontaneous combustion (for stocks);
• Damage due to the fall of a tree or of the resulting branches and objects;
• Leaking sprinklers; and
• Damage caused by smoke.
This policy provides full coverage over the basic fire policy for residential properties (private dwellings, condominiums, apartments or apartments). It covers loss / damage to buildings resulting from fire, lightning and household gas explosion, including the risks specified below.
Owner policy (price) *
Coverage is the same as the owner’s policy, except that it covers household contents instead of buildings.
Homeowner and Homeowner Policy Coverage
The owner’s and owner’s policies cover loss or damage to your building and / or its contents caused by any of the following risks:
• Fire, lightning, lightning, underground fire;
• aircraft and other aerial devices and / or objects dropped from them;
• Impact by road vehicles or animals not belonging to or under the control of the insured or a member of his family;
• Burst or overflow of water tank devices or pipes;
• Theft, but only if it is accompanied by forced and violent breaking into or out of a building or any attempted threat;
• Hurricane, cyclone, typhoon, windstorm;
• Earthquake, volcanic eruption; and
• Floods, but excluding loss or damage caused by subsidence and landslides.
* Rates are sets of fixed price lists created under insurance laws to streamline and control premium charges and policy wording