5.  What to do and what not to do:-

Property insurance in action

Two stories illustrate the wisdom of adequately protecting your property and its contents through houseowners' and householders' insurance

CASE 1 - BURGLED BUT ALL'S NOT LOST

Mr and Mrs Lo, a newly-wed urban professional couple, live in a fairly posh bungalow in Kuala Lumpur. While Mr Lo has made it his hobby to collect expensive liquor, Mrs Lo has a passion for designer handbags.

They both travel extensively and in the course of their travels, they have both accumulated some fairly expensive luxury items. However, because they travel a lot, they were prudent enough to install a burglar alarm and a safe in their bungalow for valuable items and cash.

One evening when Mrs Lo was out of town, her husband returned from work alone to find that somebody (or bodies) had broken into their home. Not only had the burglars seriously damaged the door, the locks and the alarm system, they had also broken into the safe and caused some minor damage to the extensively renovated home.

Mr Lo's expensive liquor collection, Mrs Lo's designer handbags, their extremely expensive watches and a number of valuable gifts they had received as wedding presents were all swiped by the busy burglars.

Luckily, Mr Lo had ensured he not only had homeowners' insurance but also a householders' policy (which also covers moveable contents, such as his wife's valuable designer handbag collection). He made a police report and duly informed his insurance agent of the break-in.

He was reimbursed for the damage to the dwelling , including the alarm system and the door from his houseowners' policy. The insurance company also coughed up more than RM50,000 for the loss of the possessions in his house after its adjusters had checked the retail prices of the items that Mr Lo had listed as missing.  The good news for Mrs Lo was that she could go out shopping for more designer handbags to replace the ones that had been stolen!

The claim was processed and the cheque was handed over to Mr Lo within a week of submitting all relevant documents. Now, that's something practically unheard of these days, judging from the number of people out there with horror stories compared with happy stories about insurance claims.

The simple reason Mr Lo's claim was processed so fast was because he had made the adjusters' jobs much simpler by submitting all the right documents - he completed the claim form properly and sent in a copy of the police report as well as the invoices for all the repairs.

In addition, he had items such as purchase receipts and credit card statements for the missing items to furnish proof of ownership and back up his claim list. His claim was also submitted within 30 days of the incident.

In cases such as these, and if you had read your policy and done everything right, the insurance company would have no choice but to cough up the amount needed to replace your losses.

CASE 2 - FIRE? IT'S OKAY, HE'S INSURED

The interesting thing about insurance and living in a condominium these days is this: how do you insure your four walls and ceiling against perils, knowing they are also somebody else's four walls and floor?

The answer is - you don't. But you had better make sure the company that is managing the high rise property you are living in has some form of insurance against things like fire, flood and lightning.

It is highly likely that the property management company would have effected the fire insurance cover for all the apartment units under a master policy. It is also likely that you, as the unit owner, are paying your portion of the insurance cost every time you pay your maintenance bill.

Many people are actually unaware that they are already paying for such insurance coverage together with their monthly maintenance bill. Do check if you are unsure and pay your maintenance bill on time so your interest is protected as illustrated in this case study.

Mr Ng was asleep late one night when a fire started in his apartment. He woke up, panicked, ran out, and injured himself.

By the time the fire engine came, the damage to his apartment unit and the common corridor was fairly extensive due in part to the effect of smoke and water.

Although the insurance adjusters - from the management company's insurance firm - could not speak to Mr Ng, investigations ascertained that the fire was due to an electrical wiring problem and was not his fault.

Because the master insurance policy was held by the management company, the insurance company only reimbursed the company for damage done to the original building structure. Mr Ng's interest was protected by the management company, which was entrusted with the responsibility of rebuilding his unit and the common corridor.

Imagine if Mr Ng had taken a policy on his own; who would have been responsible for rebuilding the common corridor? Furthermore, would Mr Ng have had the ability to rebuild his own unit if the insurance monies were paid to him, especially as the reconstruction work required co-ordination and co-operation from other unit owners?

To avoid this unnecessary complication, it pays to insure through your management company.

Luckily, Mr Ng had also taken out a householders' policy on the contents as well as on renovations done to the apartment. He submitted a claim to his insurance company and after investigating, the insurance company reimbursed Mr Ng's losses for the contents as well as the renovation work.

^ Article extracted from NST Property Times - Signed&Safe