Fire Insurance

Fire insurance, also known as Building Structure Insurance, is designed to protect the physical structure of a property.

It covers damage caused by insured events such as fire, as well as other major risks including typhoon, rainstorm, flooding, landslide and subsidence. If the building structure is damaged, the policy helps cover the repair, replacement or rebuilding costs.

Fire insurance focuses on the Building Structure , including:

• Floors and ceilings
• Walls, doors and windows
• Fixed fittings provided by the developer

Please note that Personal belongings and household contents inside the home are not covered under fire insurance.

Fire insurance claims are usually settled based on the actual repair or rebuilding cost of the damaged property caused by the an insured peril under the Fire Insurance policy. 

If the sum insured is lower than the actual rebuilding cost, the claim payment may be reduced proportionately, meaning you may not receive full compensation for your loss.

On the other hand, if it is over-insured, you will not receive extra compensation. The payout will still be limited to the actual loss incurred.

Ensure the sum insured for your property is adequate. 

The sum insured may be determined with reference to the professional advice of a building surveyor. 

Fire insurance is usually required by banks when applying for a mortgage.

Homeowners are generally required to purchase a fire insurance policy with a sum insured sufficient to cover the outstanding loan amount, as part of the mortgage approval conditions. This helps protect the bank’s interest in the property.

In some large residential estates, the management company may arrange fire insurance for the entire estate, with the premium included in management fees. In such cases, banks will assess whether the existing coverage is sufficient or if additional fire insurance is required.

Most fire insurance policies contain standard terms stating that unauthorised structural alterations may affect coverage.

If structural changes are made without approval from the Buildings Department — such as removing load-bearing walls or illegally combining units — this may breach the Buildings Ordinance. In such cases, insurers may have the right to terminate the fire insurance policy.

Homeowners are therefore strongly advised to consult professionals and ensure all renovation works are properly approved before proceeding.