High-value Home Insurance vs. Regular Home Insurance
According to the Asia-Pacific Residential Housing Review 2023 report by Knight Frank, Singapore is the top-performing market in the Asia and the Pacific (APAC) regions, with a high demand for residential homes and increasing price growth. With a strong demand for residential properties in Singapore, we can expect home insurance plans to become more popular as well, as homeowners will turn to options to protect their properties.
Whether it is a HDB flat, Executive Condominium (EC) or private property that you’re buying, home insurance is definitely one of the essentials to consider. However, if you’re buying an EC, private condominium or landed property, getting higher coverage for your high-value property may be more appropriate as you have much more valuable assets to protect. Let’s find out what high-value home insurance is and how it compares to the regular ones.
What Is High-value In Home Insurance?
High-value home insurance is a type of homeowner's insurance that is designed to protect homes and their contents that are worth more than the average home. These homes may be larger, have more expensive features, or be located in high-risk areas.
A high-value home in Singapore is typically considered to be one that is valued at S$1 million or more. However, some insurance companies may have a higher threshold, such as S$2 million or S$3 million.
There are a number of factors that can affect the value of a home, including its size, location, condition, and amenities. For example, a large landed property in a prime location is likely to be more valuable than a small HDB flat in a suburban area.
If you’re unsure whether your home qualifies for a high-value home insurance plan, you can get help from your preferred insurance agent or broker to assess your home's value and recommend the best plan for your needs.
Here are some examples of high-value homes in Singapore:
- Large landed properties in prime locations, such as Bukit Timah, Sentosa, and the Orchard Road area
- Luxury condominiums with high-end amenities, such as infinity pools, sky gardens, and concierge services
- Penthouses and duplexes
- Homes with unique features, such as historical significance or architectural value
Key Differences Between High-value and Regular Home Insurance
|High-value Home Insurance
|Regular Home Insurance
|ECs, private condominiums, private landed properties
|Homeowners with properties within the average market value range in Singapore such as HDB and BTO flats.
|Provides higher limits for personal property, including valuable art, jewelry, antiques, and collectibles.
|Coverage for personal property, but limits may be lower and may require additional endorsements for high-value items.
|Typically offers higher liability coverage limits, essential for high net worth individuals.
|Provides liability coverage but may have lower limits.
|Higher deductibles may be available, which can help lower premiums for those willing to assume more risk.
|Typically offers standard deductibles.
|Often includes specialised coverage options, such as coverage for wine collections, fine art, and high-end electronics.
|Offers standard coverage options without the same level of customization for unique assets.
|Higher premiums due to increased coverage limits and additional protection for highly valuable assets.
|More affordable premiums, suitable for standard homes and possessions.
|May require appraisals for high-value items to establish their worth accurately.
|Appraisals may be necessary for very high-value items, but not as common.
|Tailored risk assessment considering the unique risks associated with high-value properties.
|Standard risk assessment based on typical home insurance factors.
Looking For Home Insurance? Compare the best rates here at Moneysmart.
Factors To Consider When Picking High-value Or Regular Home Insurance
Do I Really Need High-value Home Insurance?
Here are some important questions to ask yourself when deciding whether or not you need high-value home insurance:
Do I have any unique risks or needs that would not be covered by a regular home insurance policy?
When you have unique liability concerns, such as hosting events at your home, home-sharing or short-term rentals i.e. renting out your home on platforms like Airbnb, you may need special insurance to cover guests and potential damage, so it’ll be wise to consider increased liability coverage.
Am I comfortable with the level of coverage provided by a regular home insurance policy?
There is such a wide variety of home insurance plans nowadays, with those that include cyber fraud coverage to plans which are linked to broadband subscriptions, it’ll take you some time to determine which level of coverage is better for you. Although regular home insurance coverage is a good compromise, you may still have some limitations in coverage, you’ll need to pay moderate out-of-pocket expenses for certain claims.
What is my financial situation and risk tolerance level?
If you have substantial assets and income to afford the premiums associated with insuring high-value properties and possessions, and you're risk-averse, high-value comprehensive coverage for your valuable assets, including coverage for specific risks or unique features of your property, will be suitable for you.
On the other hand, regular home insurance plans are more appropriate for individuals with a moderate financial situation and risk tolerance and are comfortable assuming some level of risk for losses related to high-value items.
Am I willing to pay higher deductibles to lower premiums?
The main drawback of selecting a higher deductible is that you'll have to pay more out of pocket if you need to file a claim. You should be financially prepared to cover this higher expense in case of a covered event, such as damage to your home.
If you have a high deductible and experience a significant loss, such as extensive damage to your home, you may find it challenging to cover the deductible and repair costs simultaneously. This could lead to financial strain, but if you have sufficient savings to cover the higher deductible in the event of a claim without causing financial hardship, then go for it.
It is important to note that the specific coverages included in a high-value home insurance plan will vary depending on the insurance company. Be sure to read the policy carefully before you buy it to understand the coverage limits, exclusions, and deductibles.
Frequently Asked Questions
What is high-value home insurance?
- High-value home insurance is a type of homeowner's insurance that is designed to protect homes and their contents that are worth more than the average home. A high-value home in Singapore is typically considered to be one that is valued at S$1 million or more. However, some insurance companies may have a higher threshold, such as S$2 million or S$3 million.
Do high-value home insurance premiums cost more than regular home insurance premiums?
- Yes, they have higher premiums due to increased coverage limits and additional protection for highly valuable assets.