Home Insurance and Renovation

July 4, 2018, 12:11 p.m.


Owning a property in Paradise is a dream come true but home owners know that one of the biggest risks of owning a house is the possible structural damage from natural disasters and this is particularly true for tropical destinations such as Fiji.

As a tropical destination filled with tranquil bays, a warm climate and easy flight connectivity, Fiji is a magnet for international property buyers but must contend with cyclonic seasons. This makes property insurance an advisable investment for all owners of residential and commercial buildings who can have peace of mind, knowing that whatever structural damage incurred will be financially covered.

Fiji has over the past few years been hit by several severe tropical cyclones with over 40 lives lost alongside the complete and partial destruction of 30,000 homes to the Category-5 Tropical Cyclone Winston which hit the country in 2016 and it carried a tag of $1.4 billion USD. The country also was subjected to further damage by two more cyclones in 2017 - 2018. However, it  has learnt lessons from each one that has impacted the country.

Similar to other South Pacific countries, houses and buildings must contend with occasional storms, and there is an official cyclone season in Fiji that runs from November to April whilst the driest months in Fiji are generally from June to October. Sadly, Fiji’s rate for property insurance is minimal and this was most evident when Fiji recorded its worst natural disaster in February 2016.

At a recent Construction Industry Council’s inaugural conference, one of Fiji’s oldest Insurance companies Tower Insurance revealed that over 90 percent of the houses damaged by TC Winston were not insured.

“The insurance market in Fiji is currently only around $150 million. In Winston, $272 million was paid out in insurance claims, $117 million by local insurers, the rest offshore.”

Tower Insurance points out that global losses from extreme events are rising and that with climate change, the intensity of cyclones is expected to increase, with more prevalence of Category 4 and Category 5 cyclones- and that there should be requirements to build to standards that will withstand such forceful disasters.

“The current cyclone certification process is in place but unless the general standard of construction was improved, the resinsurers were going to pull out. Work is being done to ensure that houses are being built to the standards in the Yellow book. ” Tower Insurance says.


Yellow Book

The Yellow book contains upgrading and building standards for new houses in Fiji. Following TC Winston, the Fiji Government through the the Commissioner of Insurance, in collaboration with the insurance industry started ensuring making insurance of existing houses subject to upgrading standards set out in the “Yellow Book”. The Yellow book is in place pending the publication and adoption of the Fiji Building Code and Fiji Home Building Manual.

This is the book by which houses should be built however since monitoring has been weak, teh banking institutions and even insurance companies follow their own means of ensuring that a house is safe or is passed.

In the National Budget for 2018 - 2019, Government has introduced a few measures to ensure that property owners upgrade their homes and buildings. Apart from this, there are also various means of accessing funding to ensure that your property is secure.


Government incentive in National Budget

To promote the upgrade and modernisation of buildings, Government has announced incentives for capital investments above $1million which excludes interior furnishing, furniture and fittings.



The incentives include a 125% tax deduction on total expenditure incurred for renovation and redevelopment, a 25% investment on total capital expenditure incurred for extension or redevelopment and as part of the qualification, applicants are required to ensure that there is a disability access, green technology is utilised such as solar panelling and that lights are installed outside the buildings. This development incentives will apply for buildings that are five years or older. It does not include hotels and apartments.

Property owners can claim this incentive only once and they will receive provisional approval based on plans and a standard allowance granted upon the completion of site inspection and audits.

For locals:

There are a few means of accessing funds for the renovation of your house.A quick means is through the banking institutes in the country such as the Bank of the South Pacific (BSP), ANZ Bank, WestPac or even Bank of Baroda. A brief look at the interest rates shows that the various banking institutes have various packages to suit their customers for example, BSP calculates its interest on the daily balance accrued and charged monthly to the account on the anniversary date for their Easy Home Loan packages whilst at ANZ, their Home Loan depends the market which then dictates whether your interest rate can go up or down and you can make extra repayments on your home loan at any time you like.


Another means is for one to access or make early withdrawals from your superannuation fund or FNPF.The Fiji National Provident Fund (FNPF) also provides for six categories under which you can take early withdrawals from your account. They are: payment of surveyings fee, quick repairs, installation of water tank, electrification or solar, extend or renovate your house and to reduce or pay off your home loan. These new withdrawal guidelines came into effect on the 1st of February this year. For all the above mentioned categories, you will have to be the official or legal owner of the property and then apply to FNPF with a required monetary fee amount.