We all know about the importance of home, contents, and car insurance- but what other insurance should you consider? As I’ve been getting older- I’ve been looking into whether I need more insurance. Sometimes while walking to work, I can feel my hips hurting and wonder what I would do if I cannot work anymore- should I get insurance for that?
I’ve now had a few experiences with insurance, so for this post, I thought I would re-visit those times when I’ve needed insurance- and how great it was to have it. Whether or not the insurance was needed because of my own stupid mistakes or someone else’s action. Either way- I’m glad I had insurance at the time. So here are some of my experiences with insurance.
Home insurance is only necessary if you own your own property. But it is necessary! In fact, I don’t think many mortgage lenders will allow you to get a mortgage on your home if you don’t have home insurance.
Home insurance is not as simple as you would first think. Especially now when home insurance is calculated using a sum insured method. This means you need to estimate how much your home would cost to re-build if it was destroyed.
Now I don’t know about you- but I don’t know how much it would cost to rebuild my house. Building materials and labour prices are always increasing. Many of the insurance providers will have calculators to estimate the cost of a complete re-build. I tend to do a few of them to compare the values that each calculator estimates it would cost and use the largest value. It generally only cost a little more to get more cover- it’s better to be over-insured than underinsured, in my opinion.
I have only had one experience with home insurance. That was when I accidentally left a box of ash on the deck after cleaning out the fireplace. In hindsight- a very stupid idea.
Even though the fireplace had not been lite for several days- there must have been a few embers in there. The ash at the time was not hot or anything. I was midway through cleaning it out and emptying it outside when I got a knock on the door. It was someone who bought a desk from me through TradeMe. I left the box outside the door to return to it later and helped them load the desk into their car.
I totally forgot about the ash and went on with my day. I awoke at 3 am to the fire alarm going off. I got out of been, and there was smoke everywhere. I opened the curtains to see flames up the side of the house. I quickly got the garden hose in my underwear and put the fire out.
Not only was I glad I had house insurance, I was glad I had fire alarms installed in the house. That was a life lesson!
Contents insurance is for both homeowners and renters. Contents insurance covers the contents of the home, including your household possessions, furniture, clothes, appliances, carpets and curtains. Most policies will have claim limits, and there may be different restrictions.
Even if you are renting you should consider contents insurance. The landlord is responsible for insuring the building, but you as a tenant are responsible for getting cover for your own possessions.
This was news to one of my boarders when our house got robbed. My flatmates mum even expected my contents insurance to cover their stolen items. I never asked my flatmates if they had insurance- which in hindsight, I should have. If they had caused a fire or somehow done extensive damage to my house, they would not have any insurance to cover it. Contents or renters insurance generally have legal liability cover to the tune of several million- which would cover damage to the property.
After being robbed, I really started to appreciate contents insurance. Being able to replace all the stolen items was great. And for the most part, my claim was paid in cash- so I could think whether or not I really to replace my stolen motorcycle jacket- since I didn’t have a motorbike anymore. It also helped that the contents insurance covered the cost of replacing all the locks. They had taken all the extra keys from a kitchen draw.
Car insurance is not required in New Zealand, but I highly recommended that you have third-party liability insurance. I still can’t believe that it’s not required. The UK, most of Europe, the US, and most of Canada have compulsory car insurance. If you do not have third-party liability insurance, you could be held responsible for any damages to another person’s vehicle. There are three kinds of automobile insurance policies: liability, collision and comprehensive.
- Third-party damage covers you if you damage someone else’s vehicle or property. This is the cheapest type of car insurance- but your car is not insured.
- You can also get Third-party damage with fire or theft coverage.
- A comprehensive car insurance policy will protect you if your car is damaged in an accident. Comprehensive car insurance also protects you if someone else is at fault for the accident.
A young guy once rear-ended me. It was his first car that he had just picked up and was on his way home. Needless to say- when he rear-ended me, the car was a right-off- picture below. He did not have any insurance.
I was lucky that at the time, my insurance policy had a clause that would cover being rear-ended up to the value of $3000- if the person who rear-ended me confessed to doing so. I gave the details of the person involved in the accident. The insurance company rang them; they confirmed that they did crash into me. I got my insurance. And the insurance company went after them for the costs—no stress or hassle for me.
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What other Insurance is out there?
What other insurance is out there, and do I need to get some? I think I need to talk to an insurance broker to discuss what types of insurance I should consider. You can basically get insurance for anything if you like and at a cost. Some of the other types of insurance I know a little bit about are;
- Income Protection Insurance
- Health Insurance
- Life Insurance
- Disability Cover
- Mortgage Insurance
- Pet Insurance
- Self Insure
What I don’t know is which types of insurance I should consider- and that is hopefully where an insurance broker will be helpful. I will hopefully find an insurance broker in the next few weeks to have a chat and may write a post about my experience.
I’d be interested to hear what Insurance you have and any of your experience with insurance. There is a poll below, or leave a comment about your insurance experiences.
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