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
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.
above article is extracted from NST Property Times by Andrew Wong