Fire Insurance For Homes With Smart Home Technology: Privacy And Security – It’s water damage. Perhaps this is not surprising – it rains a lot in many places. But what may surprise you is that things like burst pipes and broken appliances are increasingly the leading causes of water damage in homes.
In insurance parlance, these are called “non-weather water damage claims.” Worryingly, these claims are happening more frequently and becoming much more expensive. A Best’s Review article states that the average water damage claim by homeowners is now over $6,700. Large losses (over $500,000) have doubled in number over the past three years. Non-weather water damage now costs insurers (and their insureds) billions in losses each year.
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This happens for several reasons. Our housing stock is aging, as is our infrastructure. More houses are being built and growing – many houses now have extra bathrooms and laundry rooms on the second floor, which means more plumbing. (The story is probably different in Florida. You can read why this is here .)
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But the worst part is that many – if not most – water damage claims are avoidable. Pipe inspection or regular maintenance can go a long way. That’s where the Internet of Things (IoT) comes in. Smart devices and connected sensors installed in piping can detect leaks before they occur or cause too much damage. They are basically smoke detectors, but for water.
And they work. Best’s Review noted that installing IoT devices can reduce water losses by up to 93 percent.
The Review cited an IoT company CEO who claimed that leak detection devices could save insurers and their customers $10 billion each year.
Homeowners have admittedly been slow to install IoT to help detect leaks. However, insurers are hoping that raising awareness of the issue, offering policyholders incentives such as premium discounts and encouraging the installation of IoT during home construction will begin to turn the tide.
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Update: Interestingly, the state of Washington adopted a rule in 2018 that specifically lists water screens and water shut-off systems as allowable tools for an insurance company’s risk reduction program. HDB Is Your HDB Home Insured? Here’s what you need to know before you move? Why wouldn’t you buy home contents insurance for a few hundred dollars to protect a home you’ve spent thousands of dollars on?
This article was written in collaboration with AXA. All opinions expressed in the article are his independent opinion
In Singapore, many of us own our own homes. Most of us live in HDB flats where we spend a lot of time choosing the right flat we wish to live in, finding the right interior designer to help us achieve the dream house we want and of course, spending time and money on furnishing the house us to the best of our ability. In fact, HDB flat owners can easily spend $50,000 or more to renovate their home.
However, some homeowners pay less attention to their condo insurance coverage. However, not insuring our homes is one of the biggest financial mistakes we can make.
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Some HDB landlords are under the misconception that their HDB flats are automatically insured. They are wrong. Our HDB flats are not automatically insured.
What leads to this misconception is because HDB flat owners must purchase a compulsory basic fire insurance policy to cover HDB-provided internal building structures, fixtures and fittings if they have an existing HDB housing loan. This leads some apartment owners to believe that their apartment is insured, even when it is not.
Basic fire insurance does not cover renovation work, the installation of additions or home contents. If a fire, burst pipe, explosion or any other incident occurs, the resulting damages will have to be borne by us, the apartment owner, unless we have purchased separate home contents insurance.
In addition, we may also be liable for any third party damage caused to your neighbours’ homes if we are found liable.
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As we do not have home contents insurance to protect our homes, we, as apartment owners, run the risk of suffering a large financial loss if our homes are damaged.
Since Singapore is in a natural disaster free zone, many of us may take safety inside our home for granted. However, there are still scenarios that can occur that could result in significant damage to our homes.
A kitchen fire can cause damage to the oven, range hood, hobs, lighting, cupboards, water pipes, electrical wiring and wall tiles.
What if the pipe bursts and floods your toilet? If the flood also damages your neighbor’s apartment, you will be responsible for the repairs.
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An electrical fire can damage your contents. The cost of replacing your TV, wardrobe, furniture and other electronics can be high
In addition to life and health insurance, home contents insurance is a type of insurance that anyone who owns a property should have. Home contents insurance supplements, rather than replaces, the compulsory HDB fire insurance we may have purchased for our HDB flat.
To get a better idea of the various covers provided by a home contents insurance policy, we take a look at AXA SmartHome.
Building: Building refers to the flat or HDB flat which includes the building structure, fixtures and fittings based on standard specifications provided by the builder or HDB.
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Fixtures, fittings and renovation: This will refer to additional work you spend on renovating your home. It includes the cost of fitted wardrobes and cupboards, floors, kitchens, walls, suspended ceilings as well as electrical work.
Based on the insured amount of the building, up to 25% can be used for insurance for fixtures, fittings and renovation. For example, if the insured amount of the building is $500,000, $125,000 (25%) can be used to cover fixtures, fittings and renovations.
We will also have other contents such as sofa, TV, dining table, washing machine and fridge in your home which need to be replaced if they were damaged in the incident. These items are covered under our Contents Section, which pays for loss or damage to movable items within our home belonging to us, our family members or your domestic helper.
Other types of contents within our home that are also covered include money, electronics such as laptops and mobile phones as well as any other valuables such as watches, jewellery, bicycles and even artwork.
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One of the most overlooked areas of insurance is the legal liability we are liable to pay for if there is accidental bodily injury or death to others and/or their property.
Below is a non-exhaustive list of possible scenarios where we may be liable to pay someone in the event of injury, death or property damage.
Fire can easily spread from one house to another. If it is found that we or a member of our household accidentally started the fire from our home, we may be liable to pay for damages suffered by our neighbors if they choose to take legal action against us.
If incidents such as those listed above occur and we are found liable for any damages, the Worldwide Personal Liability benefit will provide us with the necessary protection. AXA SmartHome provides coverage up to $500,000.
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As a rule, we should ensure that the sum insured should be at least equivalent to the amount we have spent on our home.
However, please note that in the event of an incident such as a fire, the cost of restoring an apartment to its original condition can be much higher than what it originally cost us the first time due to cleaning work, demolition, additional repair work and even price inflation. At the same time, we may also be responsible for damages caused to the properties around us.
Getting an online quote for AXA SmartHome is easy. You can check it on the AXA website.
You can select the coverage you want for ‘Building Total’, ‘Contents Total’ and also the occupancy status of the property.
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The main difference between the two plans is that ‘Perils Insured’ provides cover for your home against loss or damage arising from specified causes, while ‘All Perils’ provides cover against a wider range of conditions.
After selecting the plan, a product summary will appear. Once you have confirmed this, you will be asked to fill in your personal details and before making your payment.
Not insuring your home is a risk not worth taking, especially since purchasing home contents insurance is relatively cheap.
With the ability to customize the level of cover, AXA SmartHome can be tailored to give you the cover you need. Premiums are based on the coverage you choose.
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Best of all, you can get all the information you need and even complete the transaction online.
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