A beginner’s guide to buying home insurance in Malaysia

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“Home is where the heart is” or so they say. But, going by the looks of continually rising property prices today, your home is where most of your money is invested too

That modular kitchen your wife always wanted, the latest home entertainment system you installed, and the luxury bathroom fittings only add to the costs.

With so much of your savings being used to buy a home and deck it up, it only makes sense that you do everything you can to protect it. Unforeseen events like an earthquake, fire, floods, or even burglary can wreak havoc on your biggest investment without warning.

And if you want to safeguard your financial interests attached to your dwelling, your best bet is to go for a home insurance.

So what is home insurance?

Otherwise known as houseowner or householder insurance, home insurance is a type of property insurance that protects your home and its contents against loss or damage. With home insurance, you’re also covered for liabilities against accidents inside your home or on your property.

In Malaysia, there are three main types of home insurance policies that you should know:

1. The basic fire policy that covers your property against loss or damage because of fire, lightning, or explosion.

2. The houseowner policy that covers your property against loss or damage because of fire, lightning, or explosion as well as floods, burst pipes, etc.

3. The householder policy that covers your property and its contents against loss or damage because of fire, lightning, or explosion as well as floods, burst pipes, etc. This policy even provides coverage for insured members if they get fatally injured.

Things to consider about home insurance in Malaysia

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Thinking about insuring your home in the near future? Well, don’t just buy the first policy that comes to your way and risk getting the wrong protection for the biggest investment of your life. Take a step back and see what you’ll need to keep in mind before insuring your home in Malaysia:

Estimating the insured value

With so much of your hard-earned money riding on your home, you need to ensure that it’s adequately insured at all times. The first step to ensuring sufficient protection is to include all costs of building your home.

Whether you’ve just renovated the bathroom or added a new floor altogether, be sure to include the cost of all renovations or enhancements made to your residential property at each point in time. This usually constitutes the “insured value” or the “sum insured”.

The sum insured value isn’t the property value itself, but rather the cost of reconstructing your home and replacing its damaged contents. So, be sure to choose an insured value that well exceeds rebuilding costs.

Choosing the right coverage

It’s safe to say that when it comes to insuring your home, you’ll leave no stone unturned in making sure that it gets every kind of protection out there. But, the truth is that you don’t need every kind of insurance coverage just because it’s available.

Besides the basic fire, houseowner, and householder policies, you can also get mortgage loan instalment protection, home maintenance insurance, and landlord insurance as extra coverage benefits for your specific needs.

These policies cover you against a wider range of damages. However, choosing extras can add to your overall premium amount. So, try to ensure that you choose these extras only if you absolutely need them.

Picking the right insurer

Choosing the right insurer is as important as getting the right coverage benefits. Start off by checking how good the insurer’s customer service network is and how willing they are to help you understand how the entire policy works.

Next, take a look at their claims settlement history and how many successful claims were paid out. Lastly, see how transparent the insurer is when it comes to the policy coverage benefits and claims settlement process.

You could also use word-of-mouth advice from neighbours, friends, and family or run a simple background check online to zero in on a good home insurer. Check out some of the top options at the bottom of this blog.

Reading the policy’s fine print

No matter how well-spoken your home insurance agent is and claims to have your best interests at heart, never forego reading the policy’s terms and conditions thoroughly. From associated fees and charges to coverage exclusions and limitations, be sure to read the policy documents carefully.

If there’s anything that you don’t understand or need to be changed, get in touch with the agent or pre-assigned contact person right away. You could also confirm renewal conditions with the agent before you choose to buy the policy.

Reducing the policy premium

Getting a comprehensive home insurance policy can be expensive. But if you’re up for driving a hard bargain, you can surely bring costs down.

To begin with, don’t include all the home contents in the policy. While you may value your old items—furniture or electronics—the insurer will only consider the depreciated cost of the item. Including old home contents will cause your premium to be high when you take the policy. But, the pay-out during claim settlement will be low.

Next, try and avoid additional cover options as much as possible unless it’s absolutely necessary. They may not always be useful and only add to the overall insurance cost.

Lastly, investing in home security and safety equipment can do wonders for your risk rating. Do your bit to secure your home as much as possible with burglar alarm systems, fire detection systems, smoke detectors, fire alarms, and security cameras among others. This way, your property will be considered a lower risk one because of which your insurance premium will be lesser.

With that said, make sure that you shop around when you need to buy home insurance in Malaysia. There are plenty of comparison platforms that you can find online where you can get information about multiple policies and see which one suits your individual needs.

Remember that you can also customise your policy according to your needs and budget. So, be sure to do enough research before settling for one.

Which are the top home insurance options in Malaysia right now?

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The following are some of the top home insurance options in Malaysia right now. Spend some time researching all the things these policies have to offer, how much do they cost, and select the option that best suits your requirements:

• Allianz Smart Home Cover
• AIA A-Essential Home
• Maybank Houseowner/Householder
• TakafulMalaysia myHouseoweners and Householders
• Great Eastern Easi-Home
• AIG Standard Home Insurance
• AmAssurance Houseowner and Householder Insurance
• Tokio Marine Houseowners/Householders Insurance
• Etiqa Houseowner and Householder Takaful
• CHUBB My Home Insurance

 

This article was originally published as A beginner’s guide to buying home insurance in Malaysia by bbazaar.my.

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