Protecting Your Assets

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When it comes to protecting your assets it can be difficult to know where to start. To ensure the things you have worked hard for in life are protected there are three key insurance types you should consider to give you peace of mind. If you already have insurance the beginning of a new year is a good time to review your current policies to ensure they are still suitable. Here is a run down of considerations and variations you should consider for home, contents and car insurance.

1. Home Insurance

As the home is usually people’s largest investment, it makes great economic sense to insure it is protected from loss. Home insurance, also referred to as property insurance or homeowners insurance, provides payment to the homeowner in the event of loss due to damage from a range of natural and accidental incidents such as fire, theft, hail and flooding. This insurance policy generally covers all domestic buildings on the property, and may include the garage, pool and fences. There a three types pf policy available:

  1. Open-ended replacement cover: the house is replaced irrespective of costs
  2. Sum-insured replacement cover: the house is replaced to the value as predetermined in the policy document
  3. Indemnity (also known as market value) cover: the house is replaced at current market sale value. This value is generally less than the cost of rebuilding the house.

2. Contents Insurance

Contents insurance covers the belongings in the home or even when temporarily moved elsewhere. Whilst Home Insurance will cover the structure of the home, Contents Insurance is necessary to protect the assets you have brought into the home. Policies with both indemnity and replacement options are available.

With a replacement option, the item would be replaced with a similar item of equal quality. Indemnity cover is based on the item’s original price and factors in depreciation when final replacement value is determined. Certain items may have a maximum limit on the payout so proof of value may be required for the policy document.

With contents, it is a good idea to make an inventory of your furnishings and update it each year to ensure it remains comprehensive. You should save these details either out of the home or in digital format where you can access them anywhere.

3. Car Insurance (applicable for other motor vehicles, boats and caravans too!)

Car or motor vehicle insurance provides financial protection against physical damage to the vehicle and/or bodily injury resulting from traffic accidents. The motor vehicle cover is based on either market value or agreed value. Market value cover means that the replacement vehicle has to be equivalent in age and condition as the insured vehicle whereas an agreed value policy stipulates the exact amount that will be paid out in the case of the total replacement of the vehicle.

The premium you pay will be affected by the excess payment you elect. Excess payments can also vary depending your age, especially if under the age of 25 years old.

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