For most people, their home is their greatest investment. Prudent owners purchase homeowners insurance to protect this investment - the most basic coverage provided is fire insurance.
History of Fire Insurance
Insurance is a practice that is thousands of years old. In the early days of human civilization, it was in the form of mutual assistance within the community. If my house was destroyed, others in the community would help me rebuild it and vice versa. But the first system of insurance that resembles what we would recognize today was developed by the Babylonians and recorded in the Code of Hammurabi in 1750 BC.
In ancient times, insurance was used primarily to protect against the financial risk of long-distance trading by sea. Sailing merchants who took out loans to fund shipments would pay an additional fee for the loan to be cancelled if the shipment was lost at sea or stolen. Like we do today, these fees would be larger or smaller based on the underwriter’s perception of risk taking into account things like the time of year, weather conditions, and the value or nature of the goods being transported. Essentially these traders were taking out an insurance policy against theft and natural disasters.
Stemming from this early form of Marine Insurance, Fire Insurance quickly developed as more people moved in cities and fire started to become a bigger risk.
After the Great Fire of London in 1666 which destroyed 13,000 homes, fire insurance came to the forefront and most households started carrying fire insurance policies. In the early days, these fire insurance companies even ran their own fire departments to protect their clients homes and minimize damage.
These early forms of insurance eventually gave birth to the vibrant and comprehensive insurance industry as we know today with insurance products available for nearly any situation from theft to terrorism.
Fire Insurance in Hong Kong
Hong Kong is a dense and bustling city with many buildings and units packed together in very tight spaces. This makes things especially susceptible to fire losses. Despite strict building codes, Hong Kong Fire Services receives around 100 calls a day for fires. Most of these stem from electrical faults or the improper preparation of food or handling of flammable items. Regardless of where you live in Hong Kong, you have a lot to lose so it’s a good idea to mitigate losses with a fire insurance policy.
In Hong Kong, fire insurance is the most basic property insurance coverage you can buy and forms the basis for nearly every property insurance policy in the world. Hong Kong fire insurance policies will protect you against property damage caused by hostile fires including damage to your building, clothing, furniture, electronics, jewelry, and other personal household items.
On top of the typical property coverage, you also get some additional coverages including:
- Additional Living Expenses - If your home is damaged by fire, it may not be habitable. In that case, the insurer will pay for any additional living expenses for you to stay at a comparable hotel, put your pet in a kennel, pay for meals if you are unable to cook at home, and other expenses over and above what you would normally spend if you could live at home.
- Water Damage or Fire Fighting Damage - While fire can cause significant damage to your home, water damage from sprinklers or damage caused by firefighters can also be significant. A fire in one room may cause the sprinklers to go off and damage property in other adjacent rooms not directly touched by fire. Similarly, firefighters may need to destroy walls, ceilings, etc. in the process of controlling a fire. The fire insurance company will pay for these resulting damages as well.
Hong Kong Fire Insurance Options
You have several options for fire insurance in Hong Kong. The most basic coverage is for fire damage and resulting fire fighting damage. But most homeowners in Hong Kong will want some additional coverage for things like theft, windstorm, earthquakes, etc.
Homeowners wanting additional coverage should purchase fire insurance with extra perils coverage for an additional cost.
Cost of Fire Insurance in Hong Kong
Fire insurance premiums are based on several factors including:
- Value of the property being insured (value of the building + value of the contents and personal property inside)
- Use of the property
- Type of property
To get a detailed home fire insurance quote and learn more about the different options available, get in touch with a licensed fire insurance specialist at Trusted Union for a no-obligation quote and risk assessment.