Home Insurance Policies - Do You Need It and What's The Price Range

This will be a short write up on what's the different in HDB fire and Home insurance and the price plan for Home insurance.

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HDB Fire Insurance

HDB home owners must buy and renew the HDB fire insurance for your homes, for as long as you have an outstanding HDB loan. 

The HDB fire insurance covers the cost of reinstating damaged internal structures, fixtures, as well as areas built and provided by HDB. It does not include home contents such as furniture, renovations and personal belongings.

The current appointed insurer for the HDB Fire Insurance Scheme is FWD Singapore Pte Ltd and the insurance is valid for a 5-year period; renewal is done once every 5 years.

From 16 August 2019 to 15 August 2024, the 5-year premiums (including 7% GST) are as follows:

Credits: HDB; HDB Fire Insurance

Home Insurance Plan

Home Insurance provides coverage for the building, fixtures, fittings as well as renovations and your household content. Its a good to pair the compulsory HDB Fire Insurance with a home insurance plan so that there's comprehensive coverage for your home.

I did some research and purchase from AIG. Since I got some data, I might as well share in here so readers can benefit from It.

Plan Name	Household Contents	Building Covrrage	Personal Liability	Personal Accident	1 Year Plan	2 Year Plan	3 Year Plan	5 Year Plan
AIG Enhanced Public Housing Contents	$150,000	$100,000	$400,000	$20,000	$70.62			$353.10
FWD Home insurance	$100,000	$120,000	$500,000	$20,000	$161.38	$314.69
Tiq Home Insurance	$90,000	$98,200	$500,000	$50,000	$131.26		$374.10	$557.89
HLAS Home Protect 360 Silver	$100,000	$100,000	$500,000	$35,000	$381.96
MSIG Enhanced Home PlusStandard Plan	$80,000	$115,000	$100,000,000	$75,000	$158.90

Conclusion

The reason why I choose AIG is cause they offer competitive rates for 5 years premium at $353.10 and there will be a $50 shopping vouchers if you took up their 5 years plan. Another reason will be I do not like to source for insurance yearly.

What is the yield of my HDB rental

Just last week on the last day of filing IRAS, I tabulate out my HDB rental income and here are the results. I hope my results can serve as a benchmark as I know there's many discussion online regarding the yield. I'm using the current value of the house in the market for a better comparison and as my house is without any loan, there isn't any loan interest in the calculation.

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Rental income	SP Bill	Internet	S&CC	Misc Expenses	Net Total	HDB Value	Yield
$34,400	$2882	$480	$1200	$4620	$24,818	$442,000	5.61%

In the Year 2018, the income is higher as the new regulation of 6 tenants per flat kick in on May 2018. This doesn't affect me much as my flat is rent to 7 persons. Misc expenses are on the high side as I replaced the aircon in 3 of the rooms and it cost me $3000 for the replacement. As for property tax, I'm paying $1068 a cost which is unavoidable.

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For 2019, I'm expecting a drop in rental income due to the limitation of 6 tenants per house rules. However, I'm not expecting to have any major repairs for this year and next year and I estimate the yield to be around 5.2% if the value of the house remains.

UOB Repricing Price

Last week I wrote about the increase of UOB 36M FDPR while I'm waiting for the bank to get back to me on repricing price.

However, the results are disappointing for being loyalty. There is a repricing fee of $800 but it might be reduced to $500 subject to bank management decision.

My current interest rate is 1.80% (36M FDPR + 0.80%). Revised rate is 2.45% (36MFPDR + 0.80%).

Now the interesting part is what UOB is offering me.

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2 Years Fixed Rate

Yr 1: 2.58% (FIXED)        

Yr 2: 2.58% (FIXED)

Thereafter: 2.58% (MR + 1.73%)

MR is the Bank’s prevailing UOB Loan Rate, currently at 0.85% per annum

2 Years Floating

Yr 1: 2.30% (MR + 1.45%)

Yr 2: 2.30% (MR + 1.45%)

Thereafter: 2.30% (MR + 1.45%)

MR is the Bank’s prevailing UOB Loan Rate, currently at 0.85% per annum

1 Month Sibor Pegged

1 Month SIBOR as at Feb 2019 = 1.82%

Yr 1: 1 Month SIBOR + 0.40%

Yr 2: 1 Month SIBOR + 0.40%

Thereafter: 1 Month SIBOR + 0.40%

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Conclusion

It doesnt make sense for me to take up 2 Years Fixed package as it's higher than my revised rate and i can reprice it shall one day the 36M rate is higher than fixed.

2 Years Floating is not attractive to me as i will be saving 0.15% in interest thus I won't choose this package too.

1 Month Sibor package might seems to be the best package compared to the other two packages. If you read my previous post, HSBC also have 1 month sibor package and their spread is 0.25% compare to UOB 0.4% spread.

The wonderful thing is, I do not need to pay for lawyer fee and valuation fees and yet i can enjoy lower interest.