Fact: If you have an outstanding mortgage loan with HDB or any financial institution, you are required to buy fire insurance. However, the cover is very basic as the insured value is limited to either the outstanding loan amount or the cost of reinstating the building structure. The former benefits financial institutions by protecting their loans to home owners. Therefore, a separate policy is needed for the building, as do your renovations and contents (e.g., furniture, household appliances and personal effects)