Buying a new home is an emotional process and a spreadsheet cannot provide all the answers.
Moreover, I am a stocks guy and have almost zero interest in property investing. Hence I am too lazy to research properties. To minimise the thinking process, my criteria was just to get the cheapest Build-to-Order (BTO) flat that is closest to an MRT station. I reckoned that Singapore is a small place and it is convenient to get around so staying near a station could get you anywhere. And BTOs tend to be priced below the market rate, so I am less likely to overpay for them.
Quite a good rule of thumb for someone who just wanted a fuss-free roof over my head. Isn’t it?
But my wife thought differently. She set her sights on the most expensive BTO project which was easily double the price of the cheapest project. We could have been able to buy the cheapest flat without taking up a loan. So although the spreadsheet says go for the cheapest, the wife wins without a doubt.
We bid for it and got it.
As with BTOs, the waiting time was painfully long. The saving grace was that we had toddlers, so living with my mother-in-law and having her assist in looking after them was extremely helpful. I am really grateful for it and hence we weren’t in a rush to move to the new home.
We did something beyond the norm while renovating our house – we designed the place to have just one bedroom to accommodate four people. The other rooms were converted into a home office and a recreational room. The office is an important one considering that the coronavirus is not going away anytime soon and I will have to do more work and webinars at home.
We did quite a fair bit of knocking and relocating the doors. The glass panels were the most expensive, costing about S$10,000.
We wanted something minimalist while spending as little as possible. But the final bill came up to a typical renovation bill and furniture cost of $60,000.
Getting a home insurance
Given the hefty cost, I would want to insure what we have spent on the house in case they get damaged in a fire, burglary or what not. A fire insurance typically covers the value of your house and the damage to others. However, our home contents and renovation would not be covered unless I get home insurance.
I dug into OCBC’s GreatHome Insurance details to figure out if it could provide me with what I needed.
There were 3 plans available – Starter, Essential and Ultimate. The differences are in the sum insured and of course their annual premiums are different too, ranging from $128 to $268.
It is definitely worthwhile to pay a few cents a day to insure $60,000 worth of renovation and furnishing in my view.
The “breakage of mirror and fixed glass” coverage is especially relevant for our place since we have an abundance of glass coupled with high energy children running around, launching projectiles at will.
We can get compensated up to S$500 (we have to pay the first S$100) should any of the glass break in an accident. Should there be an unfortunate accident, just this alone would be more than the premiums we paid for.
How to choose the Plans
Here’s the table of comparison among the plans:
The Starter Plan would have covered up to S$75,000, more than enough for the renovation and furnishing cost we have paid for. But we have other home content and valuables such as jewelleries and precious metals. So we’ll need to get higher coverage for these items.
However, there is a limit of $2,000 per article and up to 15% of the overall sum insured to be claimed for such valuables. That means that we could only get a claim of S$2,000 for 1 oz gold bar even though it is worth S$2,500 now. The higher the value of an item, the more risk we have to take.
Hence I reckoned that it makes sense to insure based on the number of items you have rather than the value it holds.
Let’s look at the valuables coverage for each plan:
- Starter Plan: Up to S$11,250 (a limit of S$2,000 per article)
- Essential Plan: Up to S$22,250 (a limit of S$2,000 per article)
- Ultimate Plan: Up to S$37,500 (a limit of S$2,000 per article)
We can divide each sum assured by S$2,000 and we will get the number of items that are worth more than S$2,000 in the house which needs to be insured
- Starter Plan: 5 items
- Essential Plan: 10 items
- Ultimate Plan: 18 items
In my case, 10 items seem sufficient for us. Hence, we went for the Essential Plan.
How to buy GreatHome insurance
It is very convenient to buy the insurance as you can complete the whole process online in about 5 minutes. You may apply online or via OCBC Internet Banking (on desktop) if you are an existing OCBC customer.
My wife and I have a joint account with OCBC so I will use that to demonstrate.
In the online banking interface, mouse over “Investments & Insurance” and select “Buy Insurance” from the dropdown menu.
On the insurance page, select GreatHome Insurance from the side menu bar.
The 3 plans will appear. Select the one that you have decided on.
I chose the Essential Plan.
The website will then ask for the details on the property to be insured.
At checkout, key in the campaign code (GH1Y10) for a 10% discount!
All done in a jiffy.
Insure your home contents
Most people believe that bad things are unlikely to happen to them and hence insurance is often an afterthought until someone close is met with an unfortunate event.
But we should get insured as long as we have valuables in our possessions and premiums make financial sense too.
I find that the GreatHome Insurance is a no-brainer for us, especially since we have just sunk a sum of money into modelling our home and we will have valuables stored in it. We would be very upset if the new home got damaged and the last thing we want is to have to fork out another sum to rebuild it.
Getting the insurance gives us a peace of mind. Find out more about GreatHome here and remember: use GH1Y10 for a 10% discount!
This post is sponsored by OCBC. The decision to buy the insurance and opinions expressed belong to the author.
OCBC does not review the contents of any such articles, website or webpage, and shall not be liable to any person for the same.
The above is for general information only. It is not a contract of insurance. It does not constitute an offer to buy an insurance product or service. It is also not intended to provide any insurance or financial advice. The precise terms and conditions of the plans are specified in the insurance policy contract.
GreatHome is underwritten by Great Eastern General Insurance Limited, a wholly-owned subsidiary of Great Eastern Holdings Limited and member of the OCBC Group. GreatHome is not a bank deposit or obligation of, or guaranteed by OCBC Bank.
Protected up to specified limits by SDIC.