SINGAPORE, August 12, 2015 - Half of Singaporean home owners would find themselves under financial pressure if they faced significant damage to their homes, saying they are ill-prepared to rebuild their homes in the event of a fire, flood or major damage. This is according to a survey1 by AIG Asia Pacific Insurance Pte. Ltd. (‘AIG’) released today.
The survey (click here to view the survey infographic) also found that a quarter (24 per cent) of Singaporean home owners believe they would face difficulties downgrading from their current living standards, should they need to undertake major repairs or rebuild their homes.
AIG’s Head of Personal Property, Ms Fiona Xu, said Singaporeans take a lot of pride in their homes, but are often ill-equipped to protect their homes in the event of a mishap.
“Risk exposures such as fire, water damage and theft are more common than people think. For example, according to the Singapore Civil Defence Force, there were 2,888 cases of residential fires in 2014,” said Ms Xu.
AIG’s claims data shows that the top claims for home contents insurance are for fire damage (37 per cent, water damage (21 per cent), and theft (11 per cent). In 2014, the average amount of a claim was about $1,500, while the highest claim made for home contents insurance to date is close to $95,000 for fire damage.
“It is alarming that while half (52 per cent) of Singaporeans say they would struggle with the financial burden of rebuilding their homes, a quarter (24 per cent) of them do not even know whether they have ever owned a home contents insurance policy,” said Ms Xu.
AIG’s survey also found that three in four (75 per cent) home owners incorrectly believe that all fire insurance purchased through their financial lenders covers loss or damage to contents and valuables in their homes due to fire, water damage or accidents. However, this type of policy usually only provides cover for the main property structure in the event of a fire.
“This is especially worrying, as unexpected accidents such as fire, water damage or theft can cause damage to much more than just the structure of your property. Home contents insurance covers major renovation works, alternative accommodation, home owners’ personal belongings and even repairs to neighbours’ damaged property which you may be liable to pay for,” Ms Xu said.
The home owners surveyed also cited jewellery, computers, furniture and furnishings, air-conditioners, and audio-visual equipment as the top five items which they want to protect. Thus, protection for these home contents is important, as there could be a significant strain on a family’s finances if a mishap occurs.
“The average home contents insurance policy for public housing costs around $70, and about $300 for private housing. Such insurance helps to ensure your property, home contents and personal belongings are covered if unexpected incidents occur. The crux, though, is that home owners get peace of mind, especially when they leave their homes unattended while working full-time or travelling for a holiday,” concluded Ms Xu.
To celebrate Singapore’s 50th birthday this year, AIG also launched a complimentary one-year home contents insurance giveaway for those receiving keys to their new or resale Housing Development Board flats in 2015.
1An online survey of 1,205 respondents commissioned by AIG and conducted by Nielsen from 17 to 30 April 2015.