All you want to know about..... PROPERTY INSURANCE

1.  Introduction:-

Insurely yours

Think of insurance as the third layer in your property's security system


Insurance is a topic that, in my opinion, tends to produce flat-line enthusiasm.  Seldom do hearts pound or blood race at the thought of signing on a policy's dotted line, maybe because it brings the dark side of reality to full view and asks us to pay the price.  It is a side where our state of denial resides, where we tend to believe that bad things can happen to everybody else, just not to us.

Quite possibly, insurance could be the only kind of business in the world where others take the risk that something catastrophic won't happen to you, while you take the gamble that it will.  For if a disaster doesn't befall you, the premiums you have paid would simply be a waste of money.

As a script, this would make for a really great surreal comedy - another opportunity for escapism - but as a topic for an article, it would probably have you closing your eyes, exhaling a sigh of controlled indifference and flipping the page.

Yes, insurance, especially property insurance, has that effect, even though it forms a vital part of securing ownership and can provide that remedy in the event something terrible happens to your most valuable possession.

Think of it as the third layer of your property's security system, the first being grilles on your doors and windows, the second being the alarm system and smoke detectors.  Should both these layers be breached, the presence of insurance would at least give you the resources to pick up the pieces and rebuild your life.

Despite this, not enough importance is placed on property insurance, either due to the same apathy that made some flip this page, or due to lack of knowledge.  This might explain why for many, the only policy they have on their property is the bare basic cover required by an end-financier to cover its interest (which is the amount borrowed), and not any structural modifications that might have been added on.  And where would that leave them if reality strikes?  Holding onto the poorer end of the stick, obviously.

Remedying the situation needn't cost an arm and a leg - merely the assessment of the reinstatement cost for enhancement, and payment of an annual premium of RM1.20 per thousand ringgit sum insured.  Remember: the amount need only be the reinstatement cost of the improved building itself, and not the total value of the property as the land portion cannot be destroyed, unless it is near a hill slope.  Should this be the case, an additional subsidence and landslip rider should be taken at a cost of 80 sen per thousand.

Other than cover for building, another insurance that should be considered for complete peace of mind is the Householder policy, which protects your contents from either damage or theft.  It might not replace that family heirloom, but at least you've taken positive steps to secure it, and that's all great-grandma could have ever asked of you.

This policy need not only apply to house owners, but also tenants, as it will secure their possessions from theft or destruction.  There are many interesting features to the policy, one being its ability to cover property temporarily removed from a house.  In my policy, I read - yes, I bother to read the fine-print in these documents - there is a clause which states that except for property removed for sale or exhibition or furniture depositories, property temporary taken away from a private dwelling can be covered against all perils, including theft.  The limit of claim in this respect is 15 per cent of the total sum insured on the contents.  Thus, if I understand my agent correctly, if I were to take my PC out of my house and leave it in a car, and if somebody were to break the windows and steal the PC, my house insurance would cover its loss.

There are loads of other nuggets in the Houseowner/Householder policies that might have eluded your attention.  For further reading, please return to contents on property insurance.

^ The above article is extracted from NST Property Times by Andrew Wong


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