Fires and floods are rare in Singapore, so it hardly seems like you’d need insurance to protect yourself from these or other disasters. And if you’re in an accident, you can head to a hospital for care. It can still be worthwhile, though, to consider buying home contents or accident insurance.

WHY BUY EXTRA INSURANCE

Many people do feel that all they need is life insurance to protect their family, fire insurance to protect their flat and perhaps health insurance to pay the doctors. And in many cases, that’s true. There were only 2,818 fires in residential premises in 2016, according to the Singapore Civil Defence Force, which means that only about 0.2 per cent of the 1.26 million households here experienced a fire.

Yet there are a variety of situations where you may have to pay for costs yourself if you don’t have extra insurance.

If you’re one of the unlucky 0.2 per cent, for example, you’ll likely find that your fire insurance policy doesn’t cover the contents of your home. Any money spent on renovations would be gone, and you’d need to buy everything from beds and bookcases to shirts and shoes, in the unfortunate case of a fire destroying your home.

Putting it in context, and considering the amount you spent on your home, a basic home contents policy for a year can cost less than dining out once.

Or if you or your children are out playing football and get into an accident, you may well have to pay for emergency treatment and physiotherapy or other costs yourself. As online insurance portal PolicyPal observed, it only takes one accident to leave you with hefty medical bills that can quickly eat up your life savings.

And in today’s gig economy, where an increasing number of people are self-employed, these policies may be more important than before. Whereas companies might have previously paid for accident insurance, self-employed consumers pay expenses on their own.

INSURANCE PRODUCTS AVAILABLE IN THE MARKET

While there are many types of insurance to consider, home contents and accident insurance can be some of the better policies for protecting you in everyday life.

Home contents insurance is designed to cover your possessions in your home. The reason you may need it is that the typical building or fire insurance policy only covers the structure of your home, such as walls. A home contents insurance policy can cover the loss or damage of everything inside it.

Personal accident insurance is designed to provide financial protection against the risk of injuries due to accidents. The policy can cover you and your family in case you suffer an injury or disability from an accident, ranging from broken bones to longer-term hospital stays or rehabilitation. Whether an accident policy covers overseas travel depends on the policy.

TIPS FOR BUYING INSURANCE

In the past, consumers often had to find an agent if they wanted a policy. Now, it’s easy to buy policies online either directly from an insurance company or through an online portal that lets you compare prices and features.

When you do buy a policy, it’s important to buy the right amount of insurance, not just the least expensive policy. Cheap can become expensive if you use the policy and it doesn’t cover your needs. Research for The Telegraph in the UK, for instance, showed that one in four consumers who have home insurance underestimate how much their home contents are worth. It can be helpful to put together an inventory of all your possessions, so that you can estimate the value and insure them for the right amount.

The policies can actually be fairly inexpensive. Home contents insurance available online recently cost S$52 or less per year, for example, while an accident policy cost about S$101. As DirectAsia claims manager Lim Wen Hwei advises, though, consumers need to decide between buying a policy that is cheaper and covers less, and a policy that costs a bit more and offers more protection.

Once you decide what insurance you need, it is important to compare prices both when you buy a policy initially and every year thereafter. As product review company Consumer Reports explained, “the watchwords for insurance are: shop, shop, shop for the best price.” Many consumers pay too much when policies renew because they shop for insurance once and then forget about it rather than checking for better prices.

One little-known factor to look out for is the “condition of average”, which can apply to fire and contents insurance. The condition means that the amount the insurance company pays is computed based on the insured amount, the value at time of loss and the amount of loss. As the General Insurance Association of Singapore explains, if the total cost of reinstating a property is S$400,000 but the property is insured for only S$300,000, there is an under-insurance of 25 per cent and the insurer will only pay 75 per cent of the reinstatement cost. It is thus important to insure your home and possessions for the correct amount.

You should also read reviews online before you buy and read the policy once it arrives, to make sure you’re working with a good company and you’re covered the way you want.

BUY THE RIGHT INSURANCE FOR YOUR NEEDS

While home contents and accident insurance aren’t for everyone, they can be helpful if the unexpected happens. With costs relatively low, skipping just one meal in a restaurant could buy you peace of mind for a year.