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​Building structure for the future

28 May 2020

​Building structure for the future

Building insurance is a large part of most short-term insurance policies. Whether it covers your home (even if you have paid it off), your office building that you use, or the one you rent out to tenants, these properties can make up a large part of your wealth portfolio.

With lockdown lingering on, vacant properties become a growing insurance concern. To build on the solid foundation of having short-term cover in place, it’s important to assess the structure of any property you are insuring, and to evaluate if the insurance you have in place is robust enough if put to the test. Here are some important reminders.

Residential-ready
If you are locked down somewhere away from home and your house is standing empty, it’s essential that your insurer is aware of this. Most policies stipulate that a property cannot be empty for more than a certain number of consecutive days. Notifying your insurer that the structure is unoccupied will provide greater certainty that claims will be honoured (provided the policy stipulations are met). If your home is left empty and you don’t disclose it, this could count against you should someone break into your property.

Whether you are away from your primary residence or safely tucked inside, it’s important to honour the terms and conditions of your short-term insurance policy. Gates must be locked, alarms must be activated (even if you only pop out for essentials, or a quick morning walk with the dog), and any other security measures must be kept in place. Failing to do this negates insurance cover, as your cover depends on the agreed terms and conditions. An insurer isn’t going to be comfortable covering a claim where a thief walked right into your property because a gate was left unlocked.

Commercial calling
Some insurers are requesting that extra security measures be added to commercial properties during lockdown. Properties like these are susceptible to crime.

As an example, some wine farms have moved stock that could be vulnerable to theft, and special underwriting was done to accommodate the move. Where clients have a long-term relationship with their insurer, some exceptions can be made during this time to ultimately decrease risks, but you have to communicate the issue as soon as possible. Even if your policy is new, ask the questions needed. Ensure sufficient cover is in place for properties that could be vulnerable to break-ins. Remember that a fire could also damage your entire property in just a matter of minutes.

If you are among those returning to work under level 4 of lockdown, make sure you check in on your policy too, notifying your insurer if anything has changed.

Sure-fire way to protect
Keeping your correct property replacement value insured is essential. Unoccupied and occupied properties can be at the same risk of fire, or flooding (caused, for example, by an unnoticed leak), causing great damage to the structure and ultimately your pocket, without enough protection in place.

Short-term insurance acts as an important safety net for your finances in a financially difficult time. It can be an annoying and a costly monthly expense until you need to claim, but you’d be hard pressed to find someone who had to rely on their insurance who regrets having paid their premiums.

Don’t do something you might forget to undo
There are ways and means to reduce insurance cover during lockdown, as some risks may decrease with you being home more often. But when life resumes to what we are used to, any changes must be reversed so that you have the right cover in place when you need it. This will be particularly true for car cover you might have reduced as your vehicle sat idly in the garage. Understandably, you may have needed to save on your premiums, but don’t get caught off guard by not reinstating the cover you need when life returns to normal.

Get the support you need too
Now is a very good time to work closely with your adviser for insight into your insurance needs. While it remains your responsibility to consider what might need cover and how much, your adviser is there to help you see the bigger picture, matching all your insurable interests to the right cover for you.

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