House insurance in the Philippines: How can foreigners obtain one in 6 steps?

If you’re a foreigner considering investing in property in the Philippines, it’s important to familiarize yourself with house insurance in the Philippines, a crucial aspect often overlooked in the home-buying process. This article aims to guide you through the complexities of securing appropriate coverage so foreigners can enjoy their new property with the peace of mind that they are well protected. Let’s dive in and discover why investing in house insurance in the Philippines is essential.

What is property insurance?

Property insurance refers to a wide-ranging category of insurance policy that provides home and property owners with protection coverage. This essentially involves paying a nominal fee to an insurance company, and in return, the company undertakes the financial responsibilities tied to loss or damage affecting properties or homes.

What would occur if a tree collapses onto a building during a severe storm, leading to substantial damage? Foreigners are then faced with covering the repair costs for the building. However, if they’ve invested in house insurance in the Philippines, they either wouldn’t be spending anything on these repairs, or the cost from their pockets would be significantly reduced.

It becomes clear that house insurance in the Philippines proves to be indispensable for all property owners, particularly those possessing valuable assets. These may consist of items like works of art, antiques, designer apparel, and premium jewelry.

Why is it important to have house insurance in the Philippines?

There are several reasons why it’s essential to have house insurance in the Philippines:

1. Shielding your property: A principal advantage of securing home or property insurance in the Philippines is the extensive protection it provides to the properties and their contents against several damages.
2. Safety first: House insurance in the Philippines is essential in safeguarding savings from unpredictable losses due to unforeseen events.
3. Stress reduction: Having house insurance in the Philippines not only has financial benefits but also contributes to emotional well-being. It ensures that foreigners are not burdened by potentially high costs of repair or reconstruction following damage to their properties.
4. Mortgage lender mandates: For potential homeowners seeking to buy a property in the Philippines through mortgage loans, securing this type of insurance becomes necessary. This is because lenders typically require building insurance to ensure the property serving as loan collateral is adequately protected.
5. Affordability and accessibility: Many might perceive house insurance in the Philippines as an expensive endeavor. However, the average premium for house insurance is quite reasonable when compared to the value of the assets being insured. In addition, obtaining house insurance isn’t a difficult process; on the contrary, it is quite accessible and easy to procure.
6. Financial protection: House insurance in the Philippines offers foreigners a shield against financial loss, entitling them to reimbursement if their property incurs damage or loss. This safeguard ensures they can maintain financial stability and offset any unexpected costs, providing a sense of security for their substantial personal investments made in the property.
7. Temporary living expenses: Having house insurance in the Philippines helps foreigners cover the cost of temporary accommodation until their home is habitable again. This includes not only hotel expenses but also food and travel expenses based on the specifics of the insurance package or the house insurance cost.

Types of house insurance

House insurance in the Philippines comes in three primary coverages: actual cash value, replacement cost, and extended replacement costs.

• Actual cash value: This coverage gives the replacement cost for damaged property, considering its actual cash value. So, if a property is a year old, the amount is based on its depreciated value.
• Replacement cost: This form of coverage gives the actual house insurance cost of replacing items as per their current market value.
• Extended replacement cost: Building costs can fluctuate, so this coverage would pay out more than the policy limit if construction prices have increased.

Different types of house insurance policies

Here are some detailed types of house insurance policies that are available in the Philippines:

1. Homeowner’s insurance

This popular insurance covers repairs, replacements, or damages, including hard-to-replace items like furniture. It’s a great layer of financial protection for possessions.

2. Burglary/theft insurance

If you’re keen to protect against losses due to theft, burglary coverage might be right up your alley. Depending on the policy, compensation may include cases of stealing involving current or previous residents, home invasions, or it may have packages that cover both theft and burglary.

3. Fire insurance

If the property stands a fire risk, consider a fire insurance policy in the Philippines tailored to your needs. Here are some of the best fire insurance providers in the Philippines, such as Stronghold Fire Insurance, SGI Philippines Fire Insurance, and Mercantile Fire Insurance, which may offer the advantage of customizable benefits. It is one of the best fire insurance options for safeguarding against such unfortunate circumstances.

4. Commercial building insurance

In the Philippines, building insurance ensures exhaustive protection for property owners against various risks and uncertainties. It covers damages to physical structures caused by disasters such as fires, earthquakes, floods, or human-initiated incidents, reinforcing the financial security of property owners.

Similarly, condo insurance in the Philippines serves as a shield for condominium owners. It covers personal belongings, internal installations, and potential liability losses, providing financial protection against unforeseen incidents or calamities.

5. Earthquake/volcanic eruption insurance

Living near a fault line or an active volcano can leave one vulnerable to seismic activities. An earthquake or volcanic eruption insurance plan in the Philippines could be your safety net.

6. Flood insurance

For regions prone to typhoons and associated flooding, a flood insurance package can provide protection. It ensures your home and livelihood are covered.

Get house insurance in the Philippines in 6 steps

Securing house insurance in the Philippines involves a multi-step process. Here’s a guide on how to proceed:

• Step 1: Different homes require different levels of coverage, so it’s important first to understand your needs. Knowing what kind of events (natural calamities, accidents, theft, etc.) are most likely to affect the property may guide you in outlining the coverage you need.
• Step 2: There are numerous house insurance companies in the Philippines, each offering various insurance packages. When choosing a house insurance provider in the Philippines, consider their standing in the industry, their specialization in building or fire insurance, the clarity and scope of their policy coverage, the quality of customer service, and other crucial factors.
• Step 3: Once you’ve researched, narrow down your options and select a policy that best fits your needs. The chosen policy should provide adequate coverage for your home at a premium that you can afford.
• Step 4: After selecting the house insurance policy, you’ll need to apply. This application process often involves providing details about the property (such as its value, location, building material, etc.) and the policyholder.
• Step 5: Once the application is approved, you must pay the premium to activate the policy. Remember that failure to pay the premiums on time could lead to the lapse of the policy.
• Step 6: It’s critical to keep the coverage up to date. Review your policy annually or whenever significant changes occur to the property value or living situation.

Please note that this is a generalized guide, and you should read through policy documents carefully and consider getting advice from insurance professionals regarding the circumstances.

How much does house insurance cost in the Philippines?

House insurance in the Philippines costs between ₱ 3,167 ($57.01) and ₱ 38,010 ($684) per year. The exact amount, however, can be influenced by various factors. Most insurance companies provide coverage between ₱ 500,000 ($9,000) and ₱ 12 million ($216,000), whereas others could reach up to ₱ 25 million ($450,000). Our insurance premium calculator gives an overview of the property insurance costs.

These are the factors that influence the house insurance cost in the Philippines:

• Location of your property
• Age and condition of your home
• Security and safety features
• Credit history
• Deductible
• Claim history
• Additional coverages
• Amenities like swimming pools
• Roof condition
• Property value and rebuilding costs

Locations excluded for house insurance in the Philippines

Some locations in the Philippines are excluded from home and building insurance coverage, including areas within one kilometer of earthquake fault lines. Other locations not covered by most building insurance companies include:

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

If you reside in any of these areas, you must check with your preferred insurance provider to determine your eligibility for coverage.

How to pick a house insurance plan and provider

Deciding on an appropriate house insurance plan for your property can be an overwhelming process due to the wide range of options available. The following guide is intended to assist you in selecting the best building insurance package to suit your requirements.

• Step 1: Examining various insurance plans can be time-consuming, but rushing through could lead to oversights. Take the time to understand each policy and its corresponding coverage thoroughly. This will identify the ideal building insurance package for your property.
• Step 2: Before purchasing a building insurance plan in the Philippines, evaluate what your specific needs are. Do you reside in an area prone to flooding? Or perhaps theft is a common problem in your locality? Select an insurance plan that recognizes and addresses these concerns.
• Step 3: While selecting the cheapest plan might be tempting, it may not offer the necessary coverage. Prioritize protection over affordability. Customize the policy with additional coverages whenever possible to ensure maximum protection.
• Step 4: Entrusting assets to an unstable insurer can be risky. The building insurance packages mentioned above originate from financially strong providers, ensuring a smoother claim settlement process. For extra assurance, check the insurer’s claim history before making the final decision. This would give a better understanding of the company’s efficiency in settling claims.
• Step 5: Many insurers have adopted digital solutions to streamline client transactions. Check whether the insurer offers online claims submission. Also, consider choosing an insurer with a local office. Regardless of whether you work with an agent, having easy access to your insurer can give you peace of mind, knowing you can reach out anytime. More importantly, opt for an insurer known for excellent customer service.
• Step 6: If you need to file a claim on your building insurance, promptly inform the insurance company, list and document all damaged property, prevent further damage, and submit proof of loss within the time limit set by the insurer. Don’t forget to check the specific deadline for the claim with your insurance company.

The best house insurance plans in the Philippines

Philippines-based insurance companies offer various building insurance coverages, from essential protection to comprehensive coverage. These companies have earned their reputation as the best due to their extensive coverage, excellent customer service, and fair claims process. Here are five of the best home and building insurance plans available in the country.

• Malayan Home Plus Protect
• AXA Property Insurance
• MAPFRE Home Insurance
• AIG Property Insurance
• BDO Home Insurance

Do you want to learn more about these insurance plans? Read our complete guide on the best house insurance plans in the Philippines to get a better understanding of these plans.

Secure your house insurance in the Philippines

Our expert guidance makes finding the right property insurance in the Philippines simpler. Our team is here to provide you with personalized advice, helping you select the insurance that fits your needs perfectly.

Avoid the hassle and confusion. Protect your property in the Philippines with confidence. For detailed assistance, just leave your name and email in the form below or email us at [email protected].

Frequently Asked Questions (FAQs)