Key Takeaways
- • Banks usually require fire insurance for the life of the mortgage
- • Basic cover protects the building, not contents unless added
- • You may choose your own insurer — not only the bank's offer
Many sign fire insurance with their mortgage without reading what it covers — yet it protects your biggest asset. Understanding it means paying well for the right cover.
How necessary
With a mortgage, almost every bank requires it for the term, since the home is their collateral. Even cash buyers benefit — premiums are tiny versus fire losses.
What it covers
| Item | Basic cover |
|---|---|
| Building | Covered |
| Fire, lightning, explosion | Covered |
| Some natural perils | Often capped |
| Contents | Add-on needed |
Choosing well
You can pick your own insurer, not just the bank's offer. Compare premiums and cover, ensure the sum insured matches rebuild cost, and add contents cover for valuables.
References
- Office of Insurance Commission (OIC)
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