Insurance compensation has been one of the focal points as investigations and relief efforts continue into the deadly blaze that tore through Wang Fuk Court in Hong Kong’s Tai Po district last week.

Preliminary estimates indicate that payouts tied to the disaster could reach HK$2.08 billion ($267 million).

The fatal fire erupted on Wednesday across seven of Wang Fuk Court’s eight buildings, all of which were under renovation. The fire destroyed the homes of nearly 2,000 households and left at least 151 people dead — including a firefighter — and scores more injured.

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Selina Lau Pui-ling, chief executive of the Hong Kong Federation of Insurers, said affected residents without home or fire insurance will likely rely solely on the estate’s coverage for compensation.

Those who had their own insurance, especially home insurance, should notify their insurers as soon as possible — even if they have lost all policy documents and are unable to estimate their current losses — and review the benefits they may be entitled to under the terms of their existing contracts, Lau said.

“Some contracts may provide compensation for accidental death. … Many policies also stipulate that if homes are deemed uninhabitable, residents are entitled to temporary accommodation or a housing allowance,” Lau said. “This is very important and helpful at the moment.”

China Taiping Insurance (HK) Co is the comprehensive underwriter for Wang Fuk Court. The insurer earlier confirmed that the estate is covered by property all-risks and public-liability insurance policies.

According to minutes of a meeting of the estate owners’ corporation, held in December 2024 and posted on the estate’s website, the property all-risks policy cover HK$2 billion for property and fire-related damages. This coverage is expected to be used to reconstruct the affected buildings.

The public liability insurance includes a HK$20 million coverage for every incident involving death or property loss, as well as a third‑party bodily injury liability coverage of HK$10 million per incident, the minutes said.

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Although the fire has affected thousands of people, it will generally be treated as a single incident, and the public liability coverage is expected to be triggered and used for compensation to residents, Lau said.

Lau added that the third-party liability insurance taken out by the renovation project’s constructor, Prestige Construction & Engineering, is also expected to come into play for residents’ compensation.

According to media reports, the contractor’s third-party liability policy, also underwritten by China Taiping, provides coverage of HK$50 million.

China Taiping earlier said it had activated an emergency mechanism and will settle claims as quickly as possible. The company has reportedly taken out reinsurance on insurance policies related to Wang Fuk Court.

China’s top financial regulator, the National Financial Regulatory Administration, earlier told insurance institutions in the special administrative region to conduct thorough assessments and provide proactive services to ensure claim settlements for affected clients are handled in a timely manner.

Lau said the local insurance sector is making every effort to provide necessary assistance for the fire’s victims, citing that some companies have proactively reached out to their clients living at Wang Fuk Court and distributed emergency funds.

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The HKFI has also set up special inquiry services to help affected residents understand the details of their life, home, building, medical, and personal-accident insurance coverage.

She suggested property owners in Hong Kong reassess their insurance portfolios, especially by considering fire insurance.

“Many who have already paid off their mortgages may overlook the necessity, given that major fire incidents are relatively rare in Hong Kong. But without fire insurance, you may have far less protection,” she said.

Home insurance is another important safeguard, yet few households have purchased it, Lau said.

“Homeowners are more likely to take out home insurance, while tenants usually do not,” she said. “But the fact is, such insurance not only protects your belongings — in some cases it can also provide temporary accommodation as we have seen in this time’s incident — which makes it especially vital.”

Contact the writer at gabylin@chinadailyhk.com