We have written two articles on fire insurance already — the overview of what it does, and the cover most people don't realise they have. This one is the practical instalment: five techniques for actually buying, useful both for a first-time buyer and for anyone coming up to renewal.
Technique 1: Set the sum insured from the rebuild cost, not the purchase price
The number one mistake is taking the price of the house including the land as the sum insured. Land does not burn. What needs to be covered is the cost of rebuilding the house. Estimate it roughly from the usable floor area multiplied by current construction cost per square metre. A realistic sum insured helps in two ways: you don't pay premiums for cover you could never actually claim, and you don't run into average-clause proportional reduction because the sum insured was set too low. Remember to adjust it when you extend the house or when construction costs move [check the conditions in the policy].
Technique 2: Walk through the house once and count the contents into the sum insured too
A sum insured on the building alone covers only the structure. Furniture, appliances, kitchen equipment and clothes together usually come to a few hundred thousand baht without the owner realising it. An easy technique: walk through the house with your phone, take video of every room, estimate the value roughly, and buy additional contents cover to match. The video also makes excellent evidence when claiming. If you rent, you can insure the contents alone — the premium is very light.
Technique 3: Check the natural perils against your actual location
A standard policy includes a basic group of natural perils under a limited annual sum, which is enough for a minor event but not for a genuinely exposed location. The technique: assess your location on its actual history. A house in an area that floods repeatedly should buy a specific additional flood limit; the same goes for areas that have had earthquakes or severe storms. The extra premium is usually modest compared with the real damage from a peril that takes the whole roof at once.
Technique 4: Look for the extra covers that answer real life
Beyond the basic perils, ask about the options that carry high value when something actually happens: the cost of temporary accommodation while the house is repaired, cover for specified valuables, and third-party liability (for instance, fire spreading from your house to a neighbour's). Each company packages these differently. Knowing what to ask for is what makes a meaningful comparison between insurers — rather than simply looking for the cheapest premium.
Technique 5: Use the policy term and the purchase channel to your advantage
There are legitimate ways to save on fire insurance premiums: a long-term policy (two or three years) usually attracts a discount on the total premium compared with renewing annually, subject to each company's conditions. And compare premiums across several channels on genuinely equivalent sums insured and cover. For a house with a mortgage, the bank usually arranges cover only for the amount of the loan; you can buy the additional portion yourself, and you have the right to choose the insurer subject to the terms of the loan agreement [check the latest information].
In short
Five techniques in brief: set the sum insured from rebuild cost, count the contents, check the perils against your location, ask for the options you would actually use, and make the policy term work for you. Do all five and the whole house and everything in it has properly fitted armour at a reasonable premium. If you would like help calculating the sum insured, or someone to read your existing policy before renewal, message us on LINE any time.
This article was inspired by material from the Thai Financial Planners Association (TFPA) and has been entirely rewritten.