Property insurance in Hong Kong (Buildings & Fire Insurance) is different from Home Contents Insurance or simply Home Insurance.

If you are the owner of the property, then you should have a comprehensive Fire Insurance policy in place for at least the rebuilding costs of the structure if it is damaged or there is a total loss due to fire or other covered peril.

Owners and Landlords

Normally, we recommend putting in place a package policy to satisfy your mortgage lender’s requirements and protect their financial interest in the property.

You will see different names used, such as Buildings Insurance or Fire & Allied Perils. In addition to fire, these policies generally also cover water damage from burst pipes, boiler explosions, lightning, and typhoons.

Fire Insurance can only cover the actual rebuilding costs of the property in the event of a total loss.

However, the lender (mortgagee), not the insurer, will specify the sum to be insured. In Hong Kong, this has led to some frustration as the cost of a survey can be expensive, and there are no online rebuild cost calculators to help.

We would advise that the sum insured be the outstanding mortgage if one exists or the rebuilding costs, whichever is greater. This can be reviewed upon renewal each year.

The sum insured will be the main factor. If applicable, the insurer will then apply loadings for age and location to calculate a premium rate to be applied to the sum insured.