PGI Property Insurance — Questions and Answers
Question 1: What does the compulsory HDB fire insurance scheme cover in Singapore?
- Everything inside the flat
- The building structure of the HDB flat against fire damage; it does NOT cover contents, renovations, or personal belongings (Correct answer)
- Only electrical fires
- Both structure and contents
Correct answer: The building structure of the HDB flat against fire damage; it does NOT cover contents, renovations, or personal belongings
The compulsory HDB fire insurance covers only the building structure. Home contents (furniture, electronics, personal items) and renovations require separate home contents insurance.
Question 2: What is 'home contents' insurance in Singapore and what does it cover?
- Insurance for the building structure only
- Insurance covering personal belongings, furniture, electrical appliances, and renovations inside the home against specified perils (Correct answer)
- Insurance for the garden and exterior
- Insurance covering only jewellery
Correct answer: Insurance covering personal belongings, furniture, electrical appliances, and renovations inside the home against specified perils
Home contents insurance protects movable property inside the home: furniture, electronics, clothing, jewellery (up to limits), and renovation fixtures against perils like fire, theft, water damage, and storm.
Question 3: What is the difference between 'replacement cost' and 'indemnity value' in Singapore property insurance?
- They are the same
- Replacement cost pays the full cost to replace an item with a new equivalent; indemnity value pays the current depreciated value of the item (Correct answer)
- Replacement cost is always cheaper
- Indemnity value is always higher
Correct answer: Replacement cost pays the full cost to replace an item with a new equivalent; indemnity value pays the current depreciated value of the item
Replacement cost covers the expense of buying a brand new equivalent item. Indemnity value deducts depreciation for wear and tear, resulting in a lower payout, especially for older items.
Question 4: What is 'public liability' coverage in a Singapore home insurance policy?
- Coverage for public events held at home
- Coverage for legal liability if someone is injured on your property or you accidentally cause damage to a neighbour's property (Correct answer)
- Coverage for publicity costs
- Coverage for public utilities
Correct answer: Coverage for legal liability if someone is injured on your property or you accidentally cause damage to a neighbour's property
Public liability in home insurance covers your legal liability if a visitor is injured in your home or if something from your home (e.g., a falling plant pot) damages a neighbour's property.
Question 5: What specific peril is commonly excluded from standard home insurance policies in Singapore?
- Fire
- Flood and earth movement (subsidence), which typically require special coverage or endorsements (Correct answer)
- Theft
- Electrical damage
Correct answer: Flood and earth movement (subsidence), which typically require special coverage or endorsements
Standard home insurance policies in Singapore typically exclude flood damage and earth movement (subsidence). Given climate change risks, some insurers now offer flood coverage as an add-on.
Question 6: How should homeowners determine the correct sum insured for their home contents insurance in Singapore?
- Use the purchase price of the home
- Calculate the total replacement value of all contents including furniture, electronics, clothing, valuables, and renovation costs (Correct answer)
- Estimate half the home's market value
- Use a standard fixed amount for all homes
Correct answer: Calculate the total replacement value of all contents including furniture, electronics, clothing, valuables, and renovation costs
The sum insured should reflect the total cost of replacing all contents at current prices. Underinsurance triggers the average clause, meaning claims are proportionally reduced.
PGI Property Insurance
What does the compulsory HDB fire insurance scheme cover in Singapore?