Despite growing awareness of home insurance, many Singapore households remain underinsured because they mistakenly believe their mandatory HDB fire insurance provides comprehensive protection, according to ECICS CEO Choi Kin Seng.
The insurer said while most homeowners hold HDB fire insurance, the policy covers only the building structure and does not protect household contents such as furniture, appliances, renovations or personal belongings.
Mr Choi said this misunderstanding continues to leave many households financially exposed when incidents such as fires, burst pipes or theft damage or destroy the contents of their homes.
He noted that demand for home contents insurance has increased in recent years, partly driven by the COVID-19 pandemic, which prompted homeowners to reassess the value of their possessions. However, despite improved awareness, a significant protection gap remains as many consumers continue to underestimate the financial risks of being uninsured.
Rising renovation costs have further increased households' exposure. According to Mr Choi, renovations for a well-fitted HDB flat can now range from S$80,000 to S$150,000, excluding the value of furniture and personal belongings.
Younger homeowners and first-time renters are becoming more aware of these risks and are increasingly researching and purchasing insurance online. However, concerns over the complexity of the claims process continue to discourage some consumers from taking up home contents cover.
Mr Choi also said the growing adoption of smart home technology is changing the home insurance landscape. As households install more connected devices, the value of home contents has increased while new categories of risks have emerged, prompting insurers to adapt coverage to address increasingly digital homes.
He said these developments underscore the importance of ensuring home contents are adequately protected, particularly as the value of household assets continues to rise.