Fire Insurance in the Philippines: Why It’s Important to Get One

Venus Zoleta
·7-min read
Fire Insurance in the Philippines | Moneymax
Fire Insurance in the Philippines | Moneymax

Do you know why March was chosen as the month to raise awareness of the causes and dangers of fire?

March marks the start of summer in the Philippines, apart from being one of the hottest months of the year. It’s also during this month when the most number of fires happen. This was why, in 1966, then President Ferdinand Marcos signed Proclamation No. 115-A declaring March as “Fire Prevention Month.”

More than 50 years later, we still lack fire prevention awareness. Year after year, the cases of fires and deaths in the country increase, averaging at 45 incidents daily[1].

Through the years, the top three causes of fires remain the same: faulty wirings, lighted cigarette butts, and open flames.

Making matters worse is the low fire insurance penetration rate in the Philippines, with the number of policyholders declining, based on data from the Insurance Commission[2]. Many Filipinos fail to see the importance of fire insurance, dismissing it merely as an added expense.

Still having second thoughts about getting fire insurance? Know more about it and act now before it’s too late.

What is Fire Insurance?

Fire Insurance in the Philippines - What is Fire Insurance?
Fire Insurance in the Philippines - What is Fire Insurance?

Fire insurance is a type of insurance that protects against financial loss due to a structure destroyed by a fire.

In simpler terms, fire insurance helps cover some or all expenses for rebuilding your home, office, or any insured property that’s burned down.

What is a Fire Insurance Policy?

A fire insurance policy is a written agreement between the insurance provider and the policyholder, in which the insurer pays for the loss of use of the insured’s property damaged by a fire up to an agreed amount. The contract also states the annual premium that the policyholder should pay to the insurance company.

Policies are valid for one year and can be renewed every year.

In the Philippines, a fire insurance policy is typically offered as a stand-alone product. Some non-life insurance companies bundle it with more extensive home insurance, property insurance, or casualty insurance package.

What Does Fire Insurance Coverage Include?

Types of Properties Covered

Fire Insurance in the Philippines - Fire Insurance Coverage
Fire Insurance in the Philippines - Fire Insurance Coverage

Fire insurance coverage includes any of the following buildings or its contents:

  • Residential properties such as houses, condominiums, townhouses, etc. (may include household content like fixtures, lights, furniture, appliances, flooring, etc.)

  • Commercial buildings such as hotels, restaurants, retail stores, malls, etc. (may include goods and stocks)

  • Warehouse buildings

  • Industrial buildings such as bakeries and factories (may include machinery and equipment)

  • General structures such as schools, churches, hospitals, clinics, etc.

Types of Disasters Covered

Fire Insurance in the Philippines - Fire Insurance Disaster Coverage
Fire Insurance in the Philippines - Fire Insurance Disaster Coverage

Fire insurance covers only accidental fires, such as those caused by lightning, faulty electrical connections, or gas explosions. Incidents due to arson, or intentionally setting fire to insured property, are not covered.

Depending on your insurance policy, it may also cover other catastrophes.

According to the Insurance Code of the Philippines (Republic Act 10607)[3], fire insurance includes coverage “against loss by fire, lightning, windstorm, tornado or earthquake and other allied risks, when such risks are covered by extension to fire insurance policies or under separate policies.”

This means if an insurance policy includes coverage for allied perils, it also covers loss or damage resulting from any of the following events:

  • Earthquake shock

  • Typhoon/Flood

  • Vehicle impact/Falling aircraft

  • Explosion

  • Smoke damage from a faulty heating or cooking unit

  • Riots/Strikes

  • Malicious damage caused by any person

  • Riot/Fire due to a strike or lockout

Is Fire Insurance Mandatory in the Philippines?

Fire insurance is not mandatory for residential properties in the Philippines, unless the property is financed through a housing loan or used as collateral in a loan.

For example, it’s automatically included in a Pag-IBIG housing loan. Premiums for fire insurance and mortgage redemption insurance form part of the monthly amortization.

As for commercial buildings, a fire insurance policy is a requirement[4] for the Fire Safety Inspection Certificate issued by the Bureau of Fire Protection (BFP). This certificate is a pre-requisite for a Business/Mayor’s Permit, Occupancy Permit, or any business license.

Thus, you can’t operate a business in the Philippines without fire insurance.

Why is Fire Insurance Important?

Fire Insurance in the Philippines - Why is Fire Insurance Important?
Fire Insurance in the Philippines - Why is Fire Insurance Important?

Mandatory or not, getting your property insured against fire is crucial for your own financial protection. The risk of fire in the Philippines is always present, what with its hot climate.

Fire can also happen anytime—you’ll never know when it could hit. Even if you’re doing everything to prevent fire in your home or office, fire from a neighboring property can turn your million-peso worth of assets into debris and ashes in a matter of hours.

Advantages of Fire Insurance in the Philippines

Fires can cause a huge loss. If you insure your property, you can gain the following benefits:

  • Compensates for the cost of repair, replacement, or rebuilding of the insured structure and its contents

  • Pays for other costs such as temporary accommodation (for homeowners) and medical bills of injured employees and death benefits to the families of deceased employees (for businesses)

  • May also provide financial protection against floods, earthquakes, and other natural disasters

  • Gives peace of mind and sense of security knowing that in case of fire, your family can have a new shelter or your business can continue to operate

How Much is Fire Insurance in the Philippines?

Fire insurance premiums in the Philippines cost from PHP 950 to PHP 2,000 per year for basic coverage of PHP 1 million.

Roughly, that’s PHP 80 to PHP 166 every month. For the same price as a cup of milk tea per month, you can already insure your investment.

How are Fire Insurance Premiums Computed?

Insurers consider the following factors in computing the actual premium of a policy:

  • Nature of the use of the property (general/residential/warehouse/industrial)

  • Materials the property is made of (wood, cement, steel, etc.)

  • Number of occupants

  • Location of the property

Owners of properties with a higher risk of fire, such as warehouses, industrial properties, and those located near a high-risk area like an explosives factory pay higher insurance premiums.

On the other hand, properties within low-risk locations (i.e., near a fire station) and residential structures have lower premiums. For residential properties, those made of cement and/or steel have lower rates than those made of combustible materials like wood. Also, a house occupied by a family of at least five is insured for a higher price than one occupied by four people or less.

To estimate your premium, refer to the Philippine Fire Tariff[5] that sets the minimum rates for fire insurance in the Philippines.

How to Get Fire Insurance in the Philippines

Fire Insurance in the Philippines - How to Get Fire Insurance
Fire Insurance in the Philippines - How to Get Fire Insurance

Not only is fire insurance affordable, it’s also easy to get. Filipinos have several options to purchase a policy:

  • Traditional method – Talk to an insurance agent who will handle the insurance purchase on your behalf. The agent will then bring your policy to you.

  • Direct method – Visit the office of an insurance company if you don’t have an agent yet.

  • Online method – Request a quote on the insurance company’s website, pay the premium online (or through any accredited partner), and receive your policy through email.

For more convenience, if you already have life insurance or car insurance, you may opt to buy fire insurance from the same provider.

List of Fire Insurance Companies in the Philippines

Most non-life insurance companies offer fire insurance in the Philippines, including the following:

  • AFPGEN

  • AIG Philippines (bundled with property insurance)

  • BDO Insurance Brokers

  • BPI/MS Insurance

  • Charter Ping An Insurance (bundled with property insurance)

  • Chubb (stand-alone product for businesses)

  • FGen Insurance

  • Oriental Assurance Corporation

  • Malayan Insurance

  • MAPFRE Insurance (bundled with home insurance and casualty insurance)

  • Mercantile Insurance

  • Paramount Life & General Insurance

  • Reliance Surety and Insurance

  • SGI Philippines

  • Standard Insurance

  • Stronghold Insurance Company

For the full list of non-life insurance companies in the Philippines, visit the Insurance Commission website[6].

Final Thoughts

Losing your home or business to fire is worse than getting robbed. Not only does it destroy structures—but it also claims lives. Aside from preventing fire in your property, make sure it’s insured. A fire insurance policy is just a small price to pay for protecting your assets.

Get car insurance today!
Get car insurance today!

Sources:

The post Fire Insurance in the Philippines: Why It’s Important to Get One appeared first on Moneymax.

Latest stories

  • COVID-19: 30 new cases in Singapore, police force admin officer and family member infected

    MOH has confirmed the detection of 30 new cases of COVID-19 infection in Singapore as of noon on Sunday (17 January).

  • Chinese border troops likely to benefit from new rules to end unfair treatment

    China is expected to send more resources to troops stationed in remote border areas, including those engaged in the current stand-off with India in the Himalayas, following an overhaul of the People’s Liberation Army’s rules on how officers are treated.A commentary published on Sunday by PLA Daily, the mouthpiece of China’s military, said the new regulations were aimed at maintaining officers’ “basic living benefits” and establishing a better management system for career development.President Xi Jinping, who also chairs the all-powerful Central Military Commission, introduced the “Provisional Regulations on the Movement of Active Military Officers” on the first day of this year, along with a series of related rules covering areas such as selection, training and promotion.Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.Military observers said the reforms might help eliminate long-standing problems that meant officers stationed in certain areas, such as the Taiwan Strait and South China Sea, were given more favourable treatment and better equipment compared with those in remote parts of the country.“There are some unfair traditions and discriminatory legacies left over from political struggles in previous decades,” Macau-based military observer Antony Wong Tong said, referring to the different treatment officials and officers in the Central, Eastern and Southeast military areas had received.For example, some officers with close connections with top leaders get promoted more quickly than their peers stationed in the remote and tough areas in the Himalayas, Wong added.“Indeed, before the outbreak of the months-long border stand-off between China and India, weapon systems deployed to the 77th Army Group in the Western Theatre Command were inferior to those given to the 72nd Army Group in the Eastern Theatre Command, which is responsible for Taiwan Strait security,” Wong said.“It’s just because the Huzhou-based 72nd Army Group in Zhejiang province has close links with Xi, while many officials in the 77th Army Groups were promoted by Xi’s political enemies Guo Boxiong and Xu Caihou.” China’s big military ship building spree to guard its aircraft carriersGuo and Xu, both former vice-chairmen of the Central Military Commission, became the most senior military officials brought down by Xi’s sweeping anti-corruption campaign.Guo received a life sentence in 2016, while Xu died in custody in 2015 while under investigation.Weapons in the Western Theatre Command have been upgraded as tensions with India rose following a deadly clash between the two sides in the Galwan Valley in June. Both sides have also increased the number of troops stationed along their disputed frontier after the incident, which left 20 Indian soldiers dead and caused an unknown number of PLA casualties.Besides replacing the J-7 fighters in the region with more advanced J-16s, other advanced weapons – including J-20 stealth fighters, H-20 helicopters, drones and rockets – have undergone high-altitude tests, suggesting they have been earmarked for the Western Theatre Command.Recent footage aired by the state broadcaster China Central Television also showed that troops in the Tibetan military region had been equipped with the latest camouflage uniforms known as the “Starry Sky” pattern.The PLA commentary said the new regulations were designed to build a system that guaranteed hardworking and responsible officers on the front line were treated fairly to ensure the army could attract and retain high-quality troops.“Under the new provisional regulations that directly link with officers’ promotion and treatment, assessment standards will more focus on combat-forces and troops stationed in tough and remote border areas,” the commentary wrote. Xi Jinping orders China’s military to be ready for war ‘at any second’A military source close to the PLA said the military, which now numbers around two million troops, has been fighting a brain drain for more than four decades.“The implementation of the new regulations is a good effort, because political loyalty tests, personal background and connections are still the most important elements for military officers to get promotion, not just their talents,” said the source, who requested anonymity.The source also stressed that the Communist Party’s rule that the “party commands the gun” still applied, adding: “That’s why the CMC needs to introduce more than 10 relevant rules and specific implementation details for the new regulations.”More from South China Morning Post: * China pulls 10,000 troops from India border, source says * High altitudes send soldiers off course in China-India border region: experts * China and India dig in at Himalayan border, with an eye on Washington * India returns Chinese soldier who strayed across disputed border * China-India border dispute: PLA ‘has built frontline observation post’This article Chinese border troops likely to benefit from new rules to end unfair treatment first appeared on South China Morning PostFor the latest news from the South China Morning Post download our mobile app. Copyright 2021.

  • Fauci says Biden goal of 100 million doses in 100 days 'can be done'

    Joe Biden's goal of seeing 100 million doses of coronavirus vaccine injected within his first 100 days in office is "absolutely" achievable, top US scientist Anthony Fauci said Sunday, days before he is to become the new president's chief advisor on Covid-19.

  • Messi sees red as Bilbao stun Barca to win Spanish Super Cup

    Lionel Messi was sent off for the first time playing for Barcelona as Athletic Bilbao stunned the Catalans to win the Spanish Super Cup on Sunday, a dramatic final finishing 3-2 after extra-time.

  • Ex-director at statutory board jailed 6 weeks for molesting subordinate

    A 67-year-old former statutory board director was on Monday (18 January) jailed for six weeks for molesting a subordinate.

  • Singapore #Fitspo of the Week: Ethel Lin

    This series is dedicated to inspirational men and women in Singapore leading healthy and active lifestyles. This week: Lawyer Ethel Lin.

  • India hails 'life saving' Covid-19 vaccine rollout

    India's Covid-19 vaccination drive had a successful start with more than 224,000 people receiving their first jabs and just three people hospitalised for experiencing side effects, the health ministry said Sunday, as reports emerged about concerns over a homegrown vaccine.

  • Facing Biden, Erdogan extends olive branch to EU

    Facing a potentially hostile US administration, Turkish President Recep Tayyip Erdogan is trying to break his isolation by mending EU relations, torn by what the bloc views as his bellicose foreign policy.

  • FWD Maid Insurance (Review): Basic Maid Coverage With Great Savings

    With security bond guarantees and 100% cancellation refund, FWD Maid Insurance helps manage the costs of hiring a maid. Given the important role domestic helpers play in our homes, it’s a given that employers should provide a reasonable amount of care and welfare to their […] The post FWD Maid Insurance (Review): Basic Maid Coverage With Great Savings appeared first on SingSaver Blog - We Compare, You Save.

  • Humbled Trump seeks warmer welcome in Florida

    President Donald Trump will leave Washington in disgrace next week, destined for a warmer welcome in Florida, where some supporters are so gung-ho they recently wrote his name on the back of a fat, lumbering manatee.

  • Guide To Singapore Savings Bond (SSB): Is This The Right Investment For You?

    Singapore Savings Bonds (SSBs) can make a safe and stable investment. Here’s a guide to its features, benefits, as well as the common questions investors might have. With costs of living on the rise and the value of cash eroding due to inflation, the minimum […] The post Guide To Singapore Savings Bond (SSB): Is This The Right Investment For You? appeared first on SingSaver Blog - We Compare, You Save.

  • 3 Hong Kong Blue-Chip Companies I would Buy

    Looking for Hong Kong stocks with good growth potential? Here are three you can consider adding to your watchlist. The post 3 Hong Kong Blue-Chip Companies I would Buy appeared first on The Smart Investor.

  • Global vaccine campaign gains pace as Brazil approves jabs

    The global Covid-19 vaccination drive gained pace Sunday as Brazil gave its first injections and India pushed on with its massive campaign, while European authorities sought to allay concerns about delays in supplies.

  • Gunmen assassinate two Afghan women judges in Kabul ambush

    Gunmen shot dead two Afghan women judges working for the Supreme Court in an ambush in the country's capital Sunday, officials said, an attack the top US envoy in Kabul blamed on the Taliban.

  • Vaccine skepticism hurts East European anti-virus efforts

    In countries like the Czech Republic, Serbia, Bosnia, Romania and Bulgaria, vaccine skeptics have included former presidents and even some doctors. Serbian tennis champion Novak Djokovic was among those who said he did not want to be forced to get inoculated.

  • 14 new COVID cases in Singapore, including 2 linked to police para-vet cluster

    The Ministry of Health (MOH) confirmed 14 new COVID-19 cases in Singapore on Monday (18 January), taking the country’s total case count to 59,127.

  • 3 Growth Stocks That Could Power Your Portfolio Higher

    These three growth stocks can provide rocket fuel for your portfolio's growth. The post 3 Growth Stocks That Could Power Your Portfolio Higher appeared first on The Smart Investor.

  • Brazil starts vaccination campaign two days early

    Authorities in Brazil, hard-hit by the coronavirus pandemic, will roll out a nationwide vaccination campaign Monday, two days earlier than announced.

  • 5 Best Sustainable Investments In Singapore

    Retail and institutional investors have been warming up to ethical investments as returns start to match their traditional counterparts. There’s no better time to hop on – here are five options across asset classes to get your feet wet. Managing your emotions will help you […] The post 5 Best Sustainable Investments In Singapore appeared first on SingSaver Blog - We Compare, You Save.

  • Twitter suspends QAnon-linked Republican lawmaker's account

    A newly elected Republican congresswoman known for promoting QAnon conspiracy theories accused Twitter of censorship on Sunday after her account was temporarily suspended for "multiple violations".