FIRE / HOUSEOWNER / HOUSEHOLDER POLICY

Types of insurance policies for residential property

There are three main types of policies which you can purchase to protect your home:

Fire policy
This policy provides cover for the building and contents and the basic policy covers loss or damage caused by fire, lightning or explosion. The policy can be extended to cover other additional perils by payment of additional premium. 

Houseowner policy
This policy provides cover for the building compared to the basic fire policy. It includes loss or damage due to flood, burst pipes, etc.

Householder Policy
This is a policy to cover your household contents and includes coverage for fatal injury to you as the insured.

If you wish to have comprehensive cover for your house as well as the contents, you should buy a Houseowner policy as well as a Householder policy. If your property is under financing, the financier may require you to take up a mortgage reducing term assurance (MRTA) policy to cover the interest of the financier. Further details of MRTA are provided under the section of Insurance Information.

Extensions/exclusions
Houseowner policy does not cover loss or damage due to subsidence, landslip, riot, strike and malicious damage. However, you can cover these exclusions with payment of additional premiums.

Householder policy does not cover theft claim if there is no evidence of forced and violent entry or exit.

Important points to note when buying insurance for your property

Houseowner policy

Insured Value
You must make sure that your property is adequately insured at all times, taking into account the renovations and enhancements made to your property. The sum insured should cover the cost of rebuilding your property in the event of loss/damage. If your property is under financing, you should make sure that your financier has taken adequate coverage. Usually, the coverage arranged by the financier will be for the amount of loan taken. You may, therefore, want to take up a separate insurance cover to extend the coverage taken by your financier.

Strata-titled properties
Master policy and individual certificate of insurance

If you own a strata-titled property, e.g. an apartment, the company managing your apartment building [management corporation (MC)] is required to take up insurance under a master policy. You must ensure that you get a copy of your individual certificate of insurance for your property to check the coverage taken up under the master policy by your MC.

Property under financing
If your apartment is under financing, the financier may require you to purchase another Houseowner policy to cover the loan taken. This will result in double-insurance. However, if your property is financed by a bank or finance company under the supervision of Bank Negara Malaysia (BNM), it has been agreed that your financier will not require you to purchase another insurance policy but it will accept the insurance policy purchased by the MC as evidence of insurance for your unit. However, the MC needs to comply with the terms and conditions required by the lending institution e.g. the insurance covers the minimum risks such as fire, subsidence and landslip.

Householder policy

Basis of compensation
You should decide on the basis of compensation of your Householder 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.

For further information about this product, please contact our nearest branch and our customer service staff will gladly assist you.