For many expatriates who have recently arrived in Hong Kong finding the right insurance products can prove to be a slight challenge. Part of the reason for this is due to the fact that insurance in Hong Kong may be slightly different from the country in which they were previously stationed, or it may be that many expatriates simply aren't aware of the types of policy that are available.

In Hong Kong there are two types of home insurance, Fire insurance and Home contents insurance. In an effort to better help you understand these two types of home insurance policies, and decide which one may be right for you there are descriptions below.

Fire Insurance

This type of policy is usually more applicable if you are the actual owner of a property, rather than a tenant leasing the house or apartment. While the intentions of this type of policy may seem painfully obvious at first glance, there are many aspects of a fire insurance plan that warrant closer inspection.

Fire insurance is designed to provide protection to the physical structure of a property, rather than the contents inside. If you are planning to buy a property in Hong Kong, rather than lease, and have obtained a mortgage then one of the requirements from the bank is typically related to you obtaining a fire insurance policy. The reason for this is that the bank is protecting its interests, and in the event of anything happening to the physical structure of your home they will then be assured of recovering their loan.

A fire insurance policy will protect you home against the 'peril' of fire. This is to say that under the scope of this type of plan fire means the ignition of something that is not meant to be on fire (namely your home). In addition to this a Fire insurance policy will usually provide cover for any fallout/side effects of a fire in your house, and will typically cover smoke damage and water damage (from fire extinguishers and the like).

Outside of basic fire protection, policyholders are usually offered the choice of obtaining an 'extra' or 'allied' perils policy. Allied perils can be obtained in addition to the standard fire coverage and will protect your home against losses incurred due to water or typhoon damage, although it is important to be aware that it may be possible to insure against a whole range of extended perils in Hong Kong under a fire insurance policy.

It is important to be aware that when obtaining a fire insurance policy the premium will typically be calculated based on a percentage of the total rebuilding cost of the property.

Home Contents Insurance

Home contents insurance, unlike fire insurance, provides coverage for your possessions, in the event of theft or accidental damage. In this regards the term 'home contents' is actually a misnomer as a policyholder is usually able to specify items/possessions to be covered under a 'worldwide all risks' option.

Items specified on a home insurance policy for worldwide all risks coverage will be protected against damage or theft anywhere in the world. Typically possessions included for coverage under this benefit include watches, jewelry, furs, and portable electronics such as lap-top computers and cameras. Due to the prevalence of international travel in modern life, many expatriates in Hong Kong obtain worldwide all risks coverage so that they are assured of the protection of their important belongings all over the world.

With a home contents policy there is typically no coverage for the actual structure of the property, however in certain cases it is possible to obtain these two plans together under an 'umbrella policy'. It is worth noting that these policies can also cover for items temporarily removed from your home, i.e. a jacket being cleaned at the dry cleaners or for your moving to a new apartment, sublimits may apply for this.

Home Contents insurance premiums are typically calculated based upon the total value of the objects being insured.

So there you have it, a brief overview of the two ways in which you are able to ensure your home and you possessions in Hong Kong.