[Fire Insurance for Older Buildings] How to buy cover for tenement buildings, village houses and ageing buildings? Premiums and key underwriting points analyzed

Many properties in Hong Kong are already over 30 or 40 years old. Older tenement-style flats, Tong Lau and village houses may serve as owner-occupied homes, and may also be used for rental income. When purchasing fire insurance, the building’s age, management condition, usage and whether there are any unauthorised structures may all affect whether cover can be underwritten, the premium and any claims.

In older buildings, wiring, plumbing and electrical distribution systems are more likely to be deteriorated, and common escape routes are also more easily obstructed by clutter. In addition, some buildings may not have fully adequate fire safety equipment, so insurers are generally more cautious during underwriting. If you want to protect the building structure while avoiding insufficient sum insured or policy terms that do not match, owners should first understand the property’s risks before taking out insurance. 

Fire insurance mainly covers damage to the building structure caused by fire and incidents specified in the policy; home insurance, by contrast, mainly covers renovation, furniture, electrical appliances and personal belongings. There is no uniform territory-wide restriction on the age of buildings for fire insurance: some products state that there is no upper age limit, while others set a clear cap (commonly around 35 to 50 years). In practice, exceeding the threshold does not necessarily mean that cover is unavailable, but it usually requires an individual quotation or the submission of additional information for special underwriting arrangements.

Insurers will take a holistic view of the property’s wiring and structural condition, fire protection facilities, management and maintenance records, intended use, and the surrounding environment. Mixed-use buildings, or low-rise buildings with restaurants or workshops, are usually treated as higher risk; village houses near hillsides or in densely vegetated areas may also be affected by underwriting due to the risk of wildfires in recent years.

Premiums are generally calculated by multiplying the sum insured by the premium rate. A commonly seen annual rate in the market is about 0.03% to 0.15% of the sum insured, but older buildings do not necessarily fall into the highest premium band; the actual quotation still depends on the individual property and policy terms. You should also note the excess: the excess for incidents such as flooding, typhoons and landslips is usually higher than for ordinary fire incidents.  

For older multi-storey buildings with an owners’ corporation: the corporation or managing company will usually purchase building insurance / collective fire insurance for the entire building, covering the building structure and common areas. Owners should obtain the policy summary or a copy from the management office to check whether the sum insured is calculated on a reinstatement basis, whether the original fixtures and fittings and decorations inside the unit are covered, and whether the bank will accept the policy for mortgage purposes. However, even where collective cover is already in place, furniture, electrical appliances, collectibles and any improvements added by the owner may still need to be covered through home contents insurance.

Tenement buildings and village houses: these are not automatically declined, but insurers often place greater emphasis on the maintenance and risk profile of the entire building, such as whether there is management in place, escape routes, fire safety equipment, the condition of the exterior walls and rooftop, and whether the property is used for both residential and commercial purposes. Some products exclude these types of property, or require individual underwriting; before taking out cover, it is advisable to prepare information on the property’s use, maintenance records, fire safety equipment and structural details. If a tenement building does not have collective fire insurance, when the owner insures a single unit, the underwriter may also assess the condition of the entire building.  

Some fire insurance policies require policyholders to comply with statutory requirements such as the Buildings Ordinance. Accordingly, opening up partition walls, removing walls that may form part of the structure, converting a separate kitchen into an open-plan kitchen, or adding a tin roof, glass room or loft on a rooftop, balcony or external wall may all breach the law, or involve fire and structural risks.

It should be noted in particular that, in an insurer’s assessment, unauthorised building works or non-compliant renovations are themselves regarded as an increase in risk, rather than being considered only where there is a direct causal link between the fire and the unauthorised structure. Unless the policyholder has obtained the insurer’s prior written consent for the relevant alterations before the damage occurs, once the condition of the insured premises changes as a result of the above alterations and the overall risk level increases, cover for the affected property may lapse. In other words, the key issue in disputes over policy liability is whether the risk has been increased by unauthorised building works or non-compliant works, and not merely whether such unauthorised building works directly caused the fire in question.

That said, this does not mean that any renovation will cause cover to disappear. The wording is aimed at alterations made without consent that increase the risk; some policies permit routine repairs and decoration within specified limits or scopes. The actual extent of cover depends on the schedule of benefits under the individual policy.

Before carrying out major renovation works, it is advisable to first have a qualified professional confirm whether approval is required, and to retain plans, approvals and work records. Where the works involve changes to structure, use or risk, the insurer should be notified before work begins, and construction should only proceed after written confirmation has been obtained. Failure to disclose material alterations at the time of taking out the policy may constitute misrepresentation, which may later give the insurer grounds to رفض?

1. First check any group insurance cover: obtain the policy details from the property management office or owners’ corporation, and confirm the sum insured for the structure, scope of cover, excess, and renewal date.
2. Top up cover according to use: owner-occupiers can pair it with home insurance for renovations and contents; landlords should clarify the respective home insurance and third-party liability responsibilities of landlords and tenants, and set these out in the tenancy agreement, while the owner should also purchase fire insurance for the unit.
3. Compare underwriting criteria, not just premiums: ask clearly about building age restrictions, whether tenement buildings/village houses are accepted, the documents required for individual underwriting, natural disaster excess, and exclusions relating to unauthorised works.
4. Update the insurer as soon as any details change: after rewiring, pipe replacement, major repairs, alterations to the layout, or a change in use, notify the insurance company proactively to avoid any mismatch between the policy details and the actual situation. 

You can also compare a range of fire insurance products via 10Life to understand the scope of cover, premium rates and excess for each plan at a glance, and find the option that best suits your needs.

Further reading:
【Fire Insurance Comparison 2026】How is it different from home insurance? Which insurer offers better cover and lower prices?
【Must-read for owners】How is fire insurance sum insured calculated? Is fire insurance already included in management fees? Read the insurance guide now 

For older buildings without an owners’ corporation or collective fire insurance, can fire insurance still be purchased?

There is a chance, but it depends on the property’s maintenance condition and the insurer’s policy. Tenement buildings, buildings without management, or high-risk village houses may require individual underwriting, with owners needing to provide additional documents, or may face higher premiums and excesses. If there is a mortgage, it is also advisable to confirm as early as possible with the bank the policy requirements it accepts.

After the mortgage has been fully repaid, is it still necessary to renew fire insurance?

Once the mortgage has been fully repaid, banks will generally no longer require fire insurance as a mortgage condition. However, owners should still consider bearing the risk of reconstruction or repair after a fire themselves. For older buildings, whether to take out fire insurance should be based on reconstruction costs, personal financial capacity, and the building’s existing protection, rather than stopping cover simply because the bank no longer requires it.  

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.