Bulk of Hong Kong homeowners mistaken about fire insurance
Only 4% of surveyed homeowners knew precisely what it construe.
The majority of Hong Kong homeowners do not fully understand their fire insurance policies, according to the latest survey by OneDegree Hong Kong.
OneDegree Hong Kong surveyed 1,107 homeowners in October last year that revealed only 4% of surveyed homeowners knew precisely both the maximum benefit limit (reinstatement cost) and beneficiary of their fire coverage (lender bank).
This means that about 96% of respondents are in general confused about the charge, insurance mechanism, benefits and coverage of fire insurances.
The survey also revealed that only 15.6% of respondents correctly picked the reinstatement cost when asked about the maximum benefit limit, whilst 30.6% did not know the amount.
Only about 27.6% accurately identified the lender bank as the beneficiary. Nearly half at 47.7% misunderstood the beneficiary as themselves or someone they designate.
9.4% respondents have insured their properties for the building reinstatement cost, whilst the value of property (43.9%) and mortgage loan amount (31.2%) are more common sum insured options amongst the surveyed homeowners.
Meanwhile, although more than half (54.9%) of the homeowners surveyed claimed they understand the difference between fire and home insurance, only 31% were able to correctly answer all situational questions about the coverage.
Some respondents mistakenly thought that fire insurance covers home contents (54.3%) and expenses such as temporary rental (39.3%) in the case of damages caused by a hazard.
Nearly three-quarters of those surveyed got fire insurance from banks or their agents and only 25.7% were aware that they can shop around when it comes to fire insurance.
“People turn to their lenders for this insurance when taking out a mortgage, not knowing that they can shop around to find the best deal. The findings, meanwhile, reflect that the fire insurance market is dominated by banks and their partnering insurers,” said Arthur Lee, CEO of OneDegree Hong Kong.