Insurance Policies for Residential Property Series - Responsibility for Purchase of Insurance

If you are buying a property from a developer, which is under construction, the insurance of the property is the responsibility of the developer. You only need to insure the property upon vacant possession from the developer.

For properties with strata titles such as flats, apartments and condominiums, it is mandatory for the management Corporation (MC) to purchase fire insurance for the whole building. The individual unit owner is required to pay to the MC his/her respective premium portion.

At the same time, if the unit is purchased through a loan, the financier would normally require the unit owner (borrower) to obtain an insurance policy for the unit, leading to a situation of double insurance.

But if you have obtained the loan from a financial institution under Bank Negara Malaysia’s supervision, borrowers will not have to buy another insurance policy for their units. Instead, these financial institutions will accept the insurance policy already purchased by the MC subject to terms and conditions. In this instance, you need to obtain the individual certificate of the master policy from the MC and present it to your financial as evidence of insurance. If your loan is not from a financial institution under the supervision of Bank Negara, you can negotiate with the institution concerned.