Protecting More Than Just Walls: Fire Insurance vs Home Insurance January 12, 2026
As we begin 2026, it is timely to review the foundations of our finances, how we should protect our wealth for our loved ones, such as something as important as protecting the roof over their heads. In Singapore, we are fortunate to be largely free from natural disasters. As a result, homeowners assume that only the most basic coverage is sufficient. However, when it comes to safeguarding your home, understanding the differences between Fire Insurance and Home Insurance is paramount.
For most homeowners who service a HDB or bank loan, fire insurance is mandatory and is typically included at the onset of loan application. Fire insurance primarily covers the structure of the property including walls, ceilings and built-in fixtures. In essence, it ensures the home can be restored to a habitable condition after a fire-related incident.
However, fire insurance does not cover the contents of your home. This means that the items such as furniture, appliances, personal belongings and renovation works are typically excluded from coverage.
While home insurance is not compulsory, it serves as a complimentary layer of protection providing a much broader scope of coverage, and helps to bridge the gaps that fire insurance does not address. Typically, home insurance includes coverage for household items, furniture, personal belongings, as well as renovation, clean-up and repair costs.
Depending on the policy, it may also cover temporary accommodation expenses while your home is being repaired, along with other incidents such as theft, burst water pipes and other forms of accidental damage.
Home insurance generally falls into two categories: “Insured Perils” and “All Risk”. As their names suggest, insured perils refer to specific events listed in the policy, such as fire, lightning, explosions, burst pipes, theft involving forced entry, and certain natural disasters. Any damage that does not arise from the events explicitly stated in the policy will not be covered.
All risk plans, on the other hand, offer wider protection. They generally cover most scenarios unless specifically excluded in the policy terms. Due to the wider scope of coverage, all risk plans typically come with higher premiums.
Beyond the type of coverage, it is also important to understand how claims are calculated. Home insurance policies typically fall under either an “Average Clause” or “First Loss” basis. For example, under the Average Clause, if the contents of your home amount to more than the insurance coverage, your claims may be proportionately reduced. In other words, being underinsured can result in lower claim settlements.
With first loss plans, this penalty does not apply. The insurer will pay up to the insured amount stated in the policy, regardless of the total value of home contents.
In summary, fire insurance ensures that the bare minimum is covered, while home insurance helps reduce financial strain when unforeseen incidents occur. As with all protection planning, the key lies in understanding what coverage you currently have, what it includes, and whether it still suits your needs.
As you start 2026 on a positive note, it may be helpful to ask yourself:
- Do I know what my existing fire insurance covers?
- Do I have adequate protection for my home contents?
- Would taking up home insurance give me peace of mind?
Protection planning is about making thoughtful decisions early, so that you are better equipped for whatever lies ahead. If you are unsure where to begin or would like a second opinion, we are always happy to help. Sometimes, a simple review can make all the difference. Wishing you a happy, healthy, and prosperous year ahead.
Contributor:
Claudia Tan
Financial Services Director
Phillip Securities Pte Ltd (A member of PhillipCapital)
https://bit.ly/TTPclaudia
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About the author
Claudia Tan
Financial Services Director
Claudia is an award-winning Financial Services Director with over 20 years of practical experience in the Financial Advisory industry. She is currently managing a team and servicing a group of clients by providing solutions, like Stock and Unit Trusts investment. As a veteran in the financial industry, Claudia has also published multiple wealth advisory articles.
Equipped with qualifications from the Society of Trust and Estate Practitioners, Claudia is constantly helping her clients to look beyond legacy planning. Her knowledge and experience have helped many understand the importance of wealth management and the need for financial planning at every stage of life, providing a sense of financial security that lasts even beyond their current generation.
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