There have been countless unpredictable destructive events through the years. Till now, experts don’t know how to protect the world from natural disasters. Although we all think our homes are the safest places and feel protected at home at the end of the day. Unfortunately, this isn’t always the case, as your home safety can be as unpredictable as the outside world.
Nearly everyone would agree they would do anything to keep their home safe, protect their valuable items and loved ones. At the same time, a few still believe that home insurance is unnecessary in a safe and modern city like Hong Kong.
Hong Kong may be a modern first-world city, but there are risks to your home, like every place in the world. They range from burglary, weather disasters, fires, and flooding. Due to these unexpected events, many lose their homes and valuable items. The article will help you understand the reasons for home insurance and why the insurance is crucial in Hong Kong.
What is Home Insurance?
A sudden misfortunate incident such as a storm or theft can turn a person or family’s world upside down. The only thing that brings hope to a person who’s been through such a disaster is when they remember they have home insurance.
Home insurance offers coverage for a home and the physical contents that were damaged by an unpredictable event. Depending on the insurance limit, these events can be anything, such as a storm, flood, earthquake, theft, vandalism or mechanical failure. As these events are considered rare, some believe this kind of insurance is unnecessary. “These events are unlikely”, – but soon you will understand that everyone, the landlord or tenant, should get home insurance.
Reasons Home Insurance is Important in Hong Kong
Hong Kong is a modern and developed city with a population of 7.4 million people and more than 7,800 high-rises. With more than 300 buildings surpassing 150 meters in height.
This statistic gives us a rough idea of how many homes there are in Hong Kong. Each one of these home/flats, low or high floors, have a chance of being affected by a natural disaster, which in Hong Kong is known as a typhoon. Typhoons are one of the most common storms that hit Hong Kong yearly several times.
Typhoon season starts in May and lasts until November. Although typhoons are part of the Hong Kong lifestyle, they can still cause unfortunate situations. The typhoons range from 1-10, with 1-3 being considered safe, and 8-10 being hazardous. Strong typhoons can cause broken windows, flooding, water seeping through walls, and even damage to the building structure. A famous example is the latest drastic typhoon 10 in 2018 that shook Hong Kong: Typhoon Mangkhut. The winds reached 250km/h and caused a record storm surge, uprooted around 1,500 trees, and leftover hundreds of windows smashed all over the city.
South China Morning Post has recently published an article that states, “Hong Kong will suffer typhoons more destructive than Mangkhut, droughts that wreak havoc on drinking water supplies and pummelling heatwaves if global warming exceeds 2 degrees Celsius (3.6 degrees Fahrenheit) by 2050″. The article shows how there is much more damage to come to homes and buildings.
2. House Fires
Fire is a hazard that can ignite from something tiny and brutally destroy everything as it grows. A fire can grow very quickly if not put out as soon as possible. This is why it is a threatening risk to a home, as it can destroy walls, furniture, expensive assets and even take a resident’s life. A house fire can occur at any time. The worst situation is when the residents are out of the house; hence there is no one to stop it, and it is too late. These house fires result in the homeowner and tenant suffering from significant loss and unrecoverable damages.
In 2022, the Hong Kong Fire station Department (FSD) received 31,111 building fire calls. As stated, Hong Kong has a large number of cases related to fires. In many cases, fires have spread through homes and resulted in terribly damaged property and, unfortunately, death. A recent case in April 2021, was due to something so ordinary as a massage chair, which had burst into flames and resulted in burning the entire building.
Common everyday tasks that one may pay no or less attention to can ultimately cause a house fire. The most common causes include cooking, faulty wiring, heating technology, overused plug points, etc. A minor fire incident can turn into a life-changing tragedy.
Floods are caused worldwide and have been known to change people’s lives for the worst due to property damage and financial loss. Many reasons, such as heavy rain, leaking pipes, or burst pipes, can cause flooding in Hong Kong. All these factors can cause the water to collect and damage walls, technology, and flooring.
A flood can also seep into wiring, causing sparks and resulting in a fire. Water damage can be almost as destructive as fire as it can cause structural damage and, like fire, affect flats nearby.
Home Floods are very common in Hong Kong due to the unpredictable weather and heavy rainstorms yearly. In Early 2021, a black rainstorm caused a flood in many homes throughout the city, causing property loss. As discussed earlier, typhoon severity will increase, causing more floods and damage. Flood damages are also one of the most expensive to recover from, as it takes months to repair.
4. Unexpected Burglary
Hong Kong is one of the safest countries in Asia, but this does not mean there are no crimes. Like any location, there is always some burglary, and anyone can be a victim. Burglary is when one illegally enters a property to steal valuable property. Everyone trusts their home is safe and leaves their most valuable items at home without thinking that a stranger could steal that item anytime. The items include TVs, laptops, wallets, speakers, and much more that they know they can sell.
Even though Hong Kong is safe, the HK government reported nearly1,000 burglary cases in 2022. This statistic shows that even when people lock their homes, there is always a chance one could find a way to enter and steal expensive assets.
Coming back home to missing valuable items can also affect a person emotionally. It causes trauma, shock, and worse emotion when one knows they cannot afford to replace them. In most cases, even if the criminal is caught, the items cannot be returned as they have already been sold. Therefore, the person is at loss and feels helpless even in a territory like Hong Kong.
Will Home Insurance Cover These Incidents?
All these damages, losses, and mental frustrations can be avoided by simply purchasing a home insurance policy. Home insurance will be one of the only things that will help recover from the above damaging incidents. Therefore, the insurance policy is becoming necessary and is proven to help many clients recover from such incidents.
Home repairs after a disaster are costly, and more expensive to replace all the valuable assets in the house. When one gets home insurance, they automatically reduce financial risk during these times of need.
Home insurance will compensate the full home when it has been damaged by a man-made or natural disaster. This means the owner does not have to spend more and more to rebuild the house. The insurance company won’t just compensate to rebuild the home but also reimburse the assets in the house at market value. Insurance will reimburse the cost of the furniture, computers, and TVs lost.
Common Misunderstandings About Home Insurance
It is a common misunderstanding by tenants who are renting their home from a landlord that they do not need home insurance as the landlord has one. This is a confusion that can cost the tenants a large financial loss. Every tenant needs home insurance to protect their valuables in the landlord’s house. The home insurance that the landlord owns only covers the physical home, like the walls, floors, and anything they own. In a case of a fire, the insurance company will only reimburse the landlord for their loss, not the tenant. Therefore tenants need to spend on tenant home insurance.
An insurance company has to be careful and analyse the cause of the incident before reimbursing the value. Home insurance fraud is a growing crime, such as starting a fire to gain money. This is why the insurance company will involve surveyors to examine the home and determine if it is a fraud.
Therefore, the insurance will not cover damages caused: by neglect, incidents with deliberate maliciousness, and failure to maintain the home properly. For example, a standard home insurance policy may not cover mould, rusting, or a fire caused by the owner’s neglect.
In conclusion, Hong Kong is one of the most expensive cities globally. Homes are one of the most significant investments one makes in Hong Kong. That’s why it is crucial to protect this investment and avoid spending more unnecessary costs – with home insurance.