Singapore

12 April 2018


Revision In The Sum Insured & Premium On RHB Bank's Mortgage Loan

Please take note that RHB Bank had revised the insured amount for the mortgage loan under the Mortgagee Interest Policy (MIP) for all properties under Management Corporation Strata Title (MCST). This change would be reflected in the customers’renewal notice where the insurance premium would be calculated based on the outstanding loan amount instead of the reinstatement amount.

Properties under MCST will have existing Fire Insurance Policy obtained by its Management Corporation. To ensure customers receive a wider coverage, the Bank has subscribed for the MIP which protects the mortgagor's liability.

Please refer to the table below to understand the difference between a MIP and Fire Insurance Policy:


Mortgagee Interest Policy (MIP)Fire Insurance Policy (FI)
What is this:
MIP is usually applicable for MCST properties which are under the bank’s mortgage charge.
What is this:
FI is usually applicable for non-MCST properties which are under the bank’s mortgage charge.
Premiums Calculation:
Based on the outstanding loan amount.
Premiums Calculation:
Based on the reinstatement value (Reinstatement cost refers to the cost of reinstating the building back to its original condition. This excludes the foundation and the value of the land).
What is insured?
This policy protects up to the outstanding loan amount and allows the Bank to safeguard its financial interests.
What is insured?
This policy covers the basic structures & fittings, but does not cover the improvements made to individual units and the amount to service a loan.
What are the risks insured?
Failure to service the loan as a result of the damage to the mortgaged unit.
What are the risks insured?
Fire damage and extraneous perils.


For more information, please visit General Insurance Association website at: -

http://www.gia.org.sg/pdfs/howtoguides_FireInsuranceGuide.pdf
http://www.gia.org.sg/public_faqs.php


Should you have further enquiries, please contact the following channels: -

Customer Care & Contact Centre at 1800 323 0100 / +603 9145 1388 (overseas)
Client Services team at +65 6704 4715 /client.services@rhbgroup.com