19 August 2020
Effective asset protection should be in place before a claim or liability occurs, since it is too late to initiate any worthwhile protection after the fact. We advise using short-term insurance to provide protection for your assets.
Short-term insurance can be very versatile due to the fact that it is only taken out over the period of time that you need it. These policies can cover anything from property and household, to travel and business insurance.
The clever thing about short-term insurance is that it caters for your ever-changing needs. It typically applies to assets of which the insurance needs change over time. This is useful because the finite nature of the policy gives you flexibility. It provides cover without locking you into one standard of living. It allows you to upgrade your car or buy a new house without paying insurance on your old assets for the rest of your life.
The premiums you pay are calculated according to your individual risk profiles and the value of the asset that is being insured. Let’s say you are insuring a car, for example. Your age, gender, driving record, the value of the car, the area where the car is regularly parked and whether you have an anti-theft device installed are all factors that are taken into consideration when calculating the premiums you will pay. Your previous insurance history is also taken into account, so the sooner you can create a reputable record the better.
Insurance policies outline certain risks that will be covered should they take place one day. In this event, you will usually have to make an excess payment (a predetermined percentage of the value of the asset, or a capped amount – depending on the policy), after which the insurer will cover the balance of the claim. It is important that your assets are valued correctly as the insurance policy won’t cover the full balance if you are under- or over-insured.
Insurance can be very specific in what is covered and you should look closely at what you are insuring and how you are valuing your assets. For example, when insuring your home there are generally three types of insurance. Buildings insurance covers the physical structure of your home so that you’re covered if repairs are needed to get the house back in order. Home contents insurance covers your appliances, computers, clothes, books and furniture. And portable possessions insurance (sometimes called all-risk insurance) covers the things that are usually in your house, but are regularly taken out, such as cell phones, laptops or designer sunglasses.
Insurance can get technical, but it shouldn’t be scary. After all, it is providing you with protection. If you feel you need some extra protection, do get in touch.