There are three most common home insurances in Malaysia, namely the houseowner policy, householder policy and fire policy.
Houseowner policy is a comprehensive residential property policy that covers the houseowner damage or loss arising from building fire, lightning and domestic gas explosion.
Meanwhile, householder policy is similar to houseowner policy, which provides a comprehensive protection except that it only covers the household contents instead of buildings.
Lastly, a basic fire policy covers both building and household contents from damage caused by fire, lightning and domestic gas explosion. The policy can be extended with additional premium to cover rare perils such as flood damage, aircraft damage, earthquake and volcanic eruption, bush or lallang fire, damage by falling tree or branches and objects therefrom.
While home insurance is not compulsory by law in Malaysia, the bank may require you to take up a mortgage insurance as a criterion in approving your housing loan application. However, not all homebuyers understand the policy clauses and their right under the policy hence some myths of home insurances in the market. Below we have listed down the four myths about home insurance and the truth about it:
1. They are not important
As home insurance is not compulsory in owning a property in Malaysia, many people have the perception that it is not important to have one as the government is not making it necessary like car insurance. However, please be reminded that property could be your biggest single investment in life and no one has a crystal ball to foresee an accident like flash flood, lightning or burglary. Therefore, having basic home insurance could give you peace of mind when bad things happen.
2. They are not necessary in stratified residential
It is true that the management office of a stratified high-rise residential project needs to purchase fire insurance on behalf of all owners. However, in most of the cases, the insurance only covers the common area and property but not individual units. For instance, if your TV is spoiled due to lightning strike, your damage is not claimable as it is not part of the common properties.
3. They are all the same
Unlike a sales and purchase agreement, home insurance policy is not standardized as it is not compulsory by law in Malaysia although it is under government monitoring.
There are many different home insurance products in the market, some insurance companies may name the product differently to differentiate themselves from the competitors. Therefore, never assume the policy is standardized. It is absolutely necessary to spend time and study through the policy before putting your signature on the policy.
4. They cover everything!
Just like life insurance and medical card products in the market, home insurance does not cover all the loss and damage of the property or the houseowner. It is depending on the insurance product coverage and premium that you signed up for.
It is worth noting that landslide and termite damage are two most common property problems in Malaysia that are not covered by most of the basic home insurance products in the market. However, the policy can be extended for the coverage with additional premium.
[Image source: Photo by Mikhail Nilov from Pexels]
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