· Or from some home building companies
· Or from your insurance company
· Don’t overlook it, and get it right
Cost can be mitigated somewhat by taking a larger than standard excess, say $1,000 instead of $250.
Make sure you’ve got emergency money in place to cover the excess.
A typical NZ home has contents worth around $75,000, including curtains, carpets, jewellery, computers, iPhones, and many other items. Yes, it’s all too easy to underestimate the contents we have.
If you need to make a claim, the insurance company may depreciate the items for age and also look for proof that you actually did own such an item. Accordingly it is a good idea to photograph all the items, preferably with you in the photo and a newspaper showing the date for added proof.
Crazy yes, but if you do ever need to claim it will help.
Jewellery and antiques should be valued and a copy of the valuation put somewhere safe.
Less and less
My kids have left home, we are giving them our surplus furniture, and we are tending to live more simply. Our contents will soon be down to about $30,000 to $40,000, and if we were to lose them, we would not replace them all either. We need less and less, and a lot of things such as TV’s cost less nowadays too.
Cost can be mitigated further somewhat by taking a larger than normal excess – say $1,000 instead of $250.
We had a fire and severe smoke damage of $75,000 to our home many years ago, a very unpleasant experience all round. To make it worse, we were allocated a brand new assessor and he was a nightmare to deal with. I would never hesitate in future to insist on a different assessor if I found it difficult to work with the first one the insurance company appoints.
Cars and Boats
Most of us could withstand the loss of $5,000 boat or car, but if we were to write off a $40,000 car or sink a $40,000 boat, it would hurt. Accordingly, most of us would be wise to insure our more valuable vehicles and boats.
Again the cost can be mitigated somewhat by taking a larger than normal excess – say $1000 instead of $400.
Read this column next week.
Don’t hate the insurance man
When an insurance man calls, think twice before chasing him away.
A man during a flood had to climb on his roof. A boat came along to rescue him but he said no, God will look after me. A while later a helicopter came along to rescue him, and again he said no, God will look after me.
He drowned and when he arrived at Heaven, he complained bitterly, but God’s answer was “I sent you a boat and a helicopter. “
Many a widow’s path has been made more manageable because a life insurance agent called.
Or a father’s path, if he has small children and his wife dies.
Younger people are getting cancer.
Accident, illness, and death can happen to anyone, regardless of age.
Fires, storms, floods and earthquakes are not uncommon in NZ.
Insure your big risks.
Save and build emergency funds so you can carry the small risks yourself.
Use a broker if you have more than an ordinary house, car and boat.
Good health that lets you earn an income is your biggest asset, so consider insuring it. However it can be complex, so get qualified advice.
Declare all pre-existing health events and conditions, even if quite small.
Once you are over 50, life and medical insurance costs rise.
Work on eliminating them by building emergency funds.
But don’t be too hasty, gradually reduce them rather than cancelling them too soon.
Insurances cost plenty so don’t waste money - review them annually
Supplied by Alan Clarke, financial & retirement adviser, & author. He also writes regular articles for the media & on line – see www.acfs.co.nz
His second book is due out in June 2014 & is entitled “The Great NZ Work, Money & Retirement Puzzle”.
Alan is an independent authorised financial adviser (AFA) FSP26532 & his disclosure statement is available on request and free of charge.