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What are they?
Property and liability insurance offers protection against damage or loss to property, assets, cars and personal valuables.
This insurance can be subdivided into three categories - fire, motor, burglary and theft. Information on the various insurance schemes, coverage and premium amounts can be obtained from insurance brokers or investment/financial planners. Fire Insurance
Loss of, or damage to, real estate and property as a result of fire and lightning can be covered through fire insurance. In addition, loss of rental income and potential profit & losses, as well as extra expenses incurred due to such disasters, can also be compensated.
There are two types of fire insurance- one that covers damage to the basic structure and the other covers household contents within the property such as furniture, fixtures and fittings and other objects.
How do they work? Coverage: The amount of coverage in fire insurance depends on the value of the property and the value of the contents within the property.
Premium: Premiums are paid yearly. Factors that affect the premium for fire insurance for residential homes are value of the property, depreciation, and value of contents. For business premises, the nature of the business is also taken into account. Claims & Payment: There are restrictions to the amount claimed depending on the cause of the fire, if it is accidental, due to negligence or intentional. In most straightforward cases, payment of claims is supposed to be made in about two weeks. Motor Insurance
Motor insurance covers legal liability arising out of negligence in the operation of a motor car, as well as physical damage to the car. At least third party insurance should be purchased when you have bought a second-hand car. For a brand new car, it is compulsory to have comprehensive insurance as imposed by the lending institution. It is also compulsory to have a valid motor insurance policy before your road tax can be renewed.
How do they work? Coverage: The amount of coverage in motor insurance depends on the value of the car, the age of the car and its market value (i.e. OMV) after taking into consideration depreciation. Premium: Premiums can be paid annually. Factors that will affect the premium amount of motor insurance are the value of the car, the age of the car, your no-claim bonus and the additional benefits that need to be covered. Claims & Payment: The amount of and restrictions on claims depend on the cause of loss, for example if the damage is accidental or caused by negligence.
Burglary and Theft Insurance
Burglary and theft insurance insures against the loss of property, money and other valuables from premises due to burglary or theft.
Most insurance companies offer burglary and theft coverage in cases of forced entry, with an additional rider for unforced entry.
How do they work? Coverage: The amount of coverage in burglary and theft insurance depends on the type and value of contents kept on the premises such as jewellery, electronic equipment and electrical goods. Premium: Factors that will affect the premium of a burglary and theft insurance are value of the contents kept on the premises. At times, insurance companies offer this option as part of a fire insurance, in which case the premium paid for this extra coverage is lower. Claims & Payment: The restrictions to the amount that can be claimed depend on whether the policy covers such circumstances as forced entry or unforced entry.
How do I find the best deal?
In trying to find the most suitable property and liability insurance, keep in mind these considerations: Premium Quotes: It is important to shop around for the lowest premium but also a policy with the maximum coverage. Terms & restrictions: In some cases there are rigid terms and restrictions or irregular house-rules set by the insurance company. For example, with regard to damage/loss claims, and other extra customer services such as car towing and 24-hour customer hot-line services. So, it is critical that you evaluate all the advantages and disadvantages of the conditions set by the insurance company. The rule of thumb is to look for the most flexible, with the widest coverage, but with the least restrictions. Service reputation / experience: It is also important to evaluate the after-sales service provided by the insurance company. This is important in the event of claims. A regular, perhaps half-yearly or annual visit by the insurance broker will also help you meet your changing needs.
Tax Implications
There is no tax implication.
This document is published for general information only. It does not have any regard to any specific objective, financial situation or the particular needs of any specific person who may receive this document. This is also not intended to provide any recommendation or advice on personal investing or to be relied upon as financial planning advice. It is not designed as a substitute for professional advice. You may wish to seek advice from your financial advisor before making any decision. Any opinion, view or estimate presented is subject to change without notice and is made on a general basis and is not to be relied on by you other than for general information purposes. Any reference to any specific company, investment product or asset class in whatever way is used for illustrative purposes only and does not constitute a recommendation on the company, investment product or asset class. While all reasonable care has been taken in preparing this document, no warranty whatsoever is given and no responsibility or liability is accepted for any loss arising directly or indirectly in connection with or as a result of any person acting on any information, opinion or statement expressed in this document.
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