Ask ten homeowners what fire insurance covers and nine will say "fire" and stop there. In fact the policy many of them hold — particularly one arranged through a bank when taking out a mortgage — covers a great deal more. This article opens the policy document to see what we actually have, building on our earlier introduction to fire insurance.
The basic perils in a standard policy — not just fire
A standard residential fire policy covers at least six main perils: fire, lightning (including damage to electrical appliances caused by lightning, subject to conditions), explosion, damage from a vehicle striking the building, damage from aircraft, and damage from water escaping from the building's internal pipework (not flooding from outside). Think about it: a neighbour reverses into your fence; a pipe upstairs bursts and the dripping water ruins the ceiling. These everyday events fall within cover that many people are already paying for and have never claimed on [check the conditions in the policy].
Natural perils: an included section whose limit you should know
Standard residential policies today usually include a basic group of natural perils — storm, flood, earthquake and hail — under a combined annual limit. That limit is designed to ease the loss, not to cover the full value of the house. If you live in an area that floods repeatedly, consider buying additional flood cover with its own limit. This is the difference between "it's in the policy" and "it's actually enough."
Temporary accommodation costs: the cover people least expect
Many plans include, or let you add, cover for the cost of renting temporary accommodation if the house is damaged so badly that you cannot live in it while it is repaired. Picture it realistically: the house burns and the family has to rent somewhere for several months. That rent is a large expense arriving exactly alongside the crisis, which is why this cover carries so much value in practice. Check whether your policy has it and for how much.
Tenants can insure too — this is not only for owners
A common misunderstanding: people renting a condo or a house assume fire insurance has nothing to do with them. In fact the building owner insures the building, while the tenant's contents — furniture, computer, clothes — are not included. A tenant can buy cover for contents alone for a very modest premium, which suits long-term renters whose belongings add up to a few hundred thousand baht.
Using your cover properly: three habits of homeowners who actually claim
First, photograph your possessions periodically — excellent evidence when making a claim. Second, keep the policy document and know the limit for each section; don't open it for the first time on the day something happens. Third, when damage occurs, notify the company quickly, record the damage before repairs, and don't throw away damaged items until they have been assessed.
In short
Fire insurance is something many households have more of than they use. Open your own policy once, look at the six basic perils, the natural-peril limit and the temporary accommodation cover, then fill the gaps that match the real risks of where you live. If you would like help reading the policy the bank arranged for you to see how far it goes, message us on LINE any time.
This article was inspired by material from the Thai Financial Planners Association (TFPA) and has been entirely rewritten.