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  • Type of insurance plan

Your insurance premium will depend on the type of coverage availed. You can choose a plan that covers your home only or both the home and its contents. Depending on your chosen plan, the value of the home, plus the value of the personal belongings in it will be considered.

  • Value of home or property

The value of the home doesn’t refer to the actual market value of the home but to the reconstruction cost. This is determined by multiplying the built-up area of the property and the construction rate per square feet.

  • Value of contents of home or property

Value of personal belongings must be specified by the insured. Depending on your chosen insurance plan, your provider may cover part of or the whole cost of your belongings.

You might be wondering why insurance premiums vary even though the homes are in the same area, and here’s why: premiums are dependent upon property information like age of the property, type of construction, and claims history. Below is a list of what information might be requested from you by your insurance provider:

  • Type of construction, e.g., tile roofs, hardwood floors, etc.
  • Age of the property
  • Claims history or “losses” experienced in the previous years
  • Rebuilding cost or sum insured

Subject to the information above, your provider will apply an “insurance rate” to be multiplied to the sum insured. The formula then becomes:

Gross annual premium = Sum insured x premium rate 

Premium tax = Gross annual premium x premium tax rate

Net annual premium = Gross annual premium + Premium tax

Example computation:

₱5,000,000 x 0.12%  = ₱6,000, the gross annual premium

₱6,000 x 2% = ₱120, the premium tax

Hence, the net annual premium will be ₱6,000 + ₱120 = ₱6,120

The maximum amount of insurable property varies from provider to provider. Some have a maximum of ₱10 million, while some can go up to ₱25 million.

BWD stands for broad water damage, which refers to damage to your home caused by floods or waterbacking up from sewer systems into your home. This also includes BOWTAP or bursting or overflowing of water tanks, apparatus, or pipes.

No one wants disasters to befall their home; unfortunately, they are often inevitable, and without insurance coverage, the best you can do is expect the worst but hope for the best. Insurance companies consider natural disasters and catastrophes like floods and earthquakes as “acts of nature” or “force majeure, which is French for “superior force.” Acts of nature are usually unforeseeable, unavoidable, and out of your control, plus, the damage they can do to your home can be very costly. Below are the instances considered as acts of nature in a standard insurance policy:

  • Lightning
  • Fire 
  • Windstorms: hurricanes, tornadoes, severe thunderstorms, hail, ice storms
  • Volcanic eruptions
  • Earthquakes 
  • Floods
  • Mudslides 
  • Explosions
  • Vandalism
  • Civil unrest
  • Acts of terrorism
  • Family Personal Accident Coverage (Accidental Death and Disablement) 
    • Principal Insured – up to ₱100,000
    • Spouse – up to ₱50,000
    • Children (max. of 3-4 legitimate or legally adopted children between 1 and 21 years old, and residing at the insured’s declared premises) – up to ₱25,000 
  • “Kasambahay” Coverage
    • Up to ₱5,000 per “kasambahay” to cover clothing and other personal belongings
    • Up to ₱5,000 per “kasambahay” for medical expenses due to accidental bodily injury

(Strictly) residential or private dwelling is a basic property that can be covered with home insurance. Single and detached unit and apartments (up to five [5] residential units) can also be insured.

Unfortunately, locations within one (1) kilometer distance of the known earthquake faultline are not acceptable for being insured. Some insurance companies also consider these locations not acceptable:

  • Pasay (Baclaran, Divisoria, Malibay)
  • Kalinga Apayao
  • Marawi City
  • Sultan Kudarat
  • Sulu Province
  • Basilan
  • Lanao del Sur
  • Maguindanao
  • North Cotabato
  • Reclaimed areas, congested/conflagration areas

Home locations that are within flooded area will be subject for approval of the insurance company. If approved, the premium of your home insurance package may be higher than the standard one.

The minimum premium of home insurance (exclusive of taxes) ranges from ₱1,000 to ₱3,000 per year.