Expecting the Unexpected – Why do we insure our most valuable assets?

With Europe in dire financial straits, and the rest of the world looking on, the international economic climate has rarely looked so frosty, and these problems abroad are having a massive effect on how we should and are, spending our money at home. With all of us feeling the pinch in these tough times, it might be tempting to try and cut corners at home, saving pennies now in the hope that it won’t come back to haunt us in the future, but if there’s one thing this current crisis should have taught us, it’s that we never really know what’s around the corner.

That’s why it’s more important now than ever before to make sure that your major assets are secured and insured. A little investment now could save you huge costs further down the line, and if you want to be sure of the security your assets give you long term, you need to make sure they’re protected.

While it might be strange to view it this way, probably the biggest asset any of us have got is ourselves, our body. It’s having a healthy body that enables us to work to earn money and buy the assets we own. Likewise it enables us to care for and protect those people closest to us. Yet, when we’re young and in the prime of our lives, insuring our health is often the last thing we think of.

Given the excellent free healthcare we receive from the NHS, health insurance might not be appropriate for all of us. But if serious disease runs in your family, or you work in a dangerous environment, it could be well worth the investment. Health and life insurance packages don’t just cover treatment costs for you, but they’ll provide cash to cover mortgage payments on your house, keeping your family safe. As such they’ll protect the assets you’ve invested in, and your loved ones.

After your body, perhaps the biggest asset you’ll ever own is your house, and its contents. But it’s strange how easily people are tempted to overlook their property when it comes to insurance. If you have been, think again. Imagine your house as a pile of money (say £150,000). Would you leave that pile of money open to the elements, at risk of damp rotting it away, or a boiler breaking and destroying half of it? No you wouldn’t. You’d want to keep it as safe as possible, but by not insuring your house that’s exactly what you’re doing.

By insuring your house, you’re protecting the money you’ve invested in it, so that when a pipe bursts, or you discover rot in the roof, you can get it fixed. Failure to insure properly means either you’ll end up paying a huge lump sum to get it fixed when it happens, or worse still, you won’t have the cash at all, and your property will fall into disrepair. A small investment in insurance now will bypass both of those problems.

This is more important still if you’re a landlord. Remember, when you start letting your property out to tenants, you standard home insurance won’t be valid. If you wish to start renting, you’ll need to take out comprehensive landlord insurance instead. Landlord insurance will cover both your building ­– that is the structure and the boiler, pipes etc. – but also some contents. This may seem surprising, given much of the contents will belong to your tenant, but don’t forget carpets, curtains and white goods etc. belong to you and are not covered by buildings cover.

The reason insurance in this case is perhaps even more important than in your own home, is because tenants will demand immediate action if something is damaged. While you might be able to survive without a fridge for the week, or cope until you’ve saved money to fix your boiler, your tenants will want these things sorted immediately, and it’ll be in their tenant’s agreement that you do so. Failure to sort these things out might cause them to withhold rent, leaving you with not only a problem to fix, but less money coming in to do so. Taking out the right insurance can ensure that you never face these problems.

Landlords and other business owners need to remember that protecting your business is essential, because this is the lifeblood of your family. And in business more than anywhere else, life can be very unpredictable. Here it’s not just about financial instability, but protecting yourself legally in the marketplace, against both complaining customers and rival businesses. But such protection is easy to find, with competitive business insurance freely available through multiple brokers. Get these three things – body, home, business – protected, and you’ll be well on your way to a secure future.

Posted by maglane on Nov 24 2011. Filed under Insurance News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry