The amount of compensation depends on the basis of the cover:

1. Market Value – It will pay the value of the property insured at the time of damage or loss less due allowance for wear and tear and/or depreciation and subject to the deduction of any excess and amounts which you required to bear under the policy.
2. Reinstatement Value (new for old) – It will pay full cost of repairing the damaged building without any deductions being made for wear, tear or depreciation, provided that the sum insured is adequate to cover the total cost of reinstating the building.

The price you pay will be based on the sum insured, type of building and construction materials used. The insurance premium charged for this policy is in accordance with the Revised Fire Tariff which is regulated by the General Insurance Association of Malaysia (Persatuan Insurans Am Malaysia).

You are required to declare only those articles of greater value than 5% of the total sum insured on the household contents (except furniture, pianos, organs, household appliances, radios, television sets, video recorders, hi-fi equipment and the like).

If you do not insure your property at full value, the average condition will apply and you cannot claim for the full amount of loss. For example, if the full value of the house is RM500,000, and you only insure for RM400,000. If your loss on the property is estimated at RM100,000, you can only get back RM80,000 calculated as follows:

Claim amount : (Sum insured : RM400,000 / Rebuilding cost : RM500,000) X Loss : RM100,000 = RM80,000