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Nobody likes to imagine their life will take an unexpected turn for the worst, but it pays to consider the possibility - and have measures in place to ensure you are protected.
Providing you have taken the appropriate steps to look after your health and your assets, the fallout and disruption from such events can be minimised substantially.
CASE STUDY - Make sure your insurance scheme is best for you.
We were approached by an Agricultural Contractor who felt he had not been served well by his current, large, nationwide broker. We reviewed his situation, went to a number of insurers we knew were not part of his existing brokers’ scheme and promptly reduced his total insurance bill by around 20%.
In addition to knowing his insurance now suited his business requirements, he has an additional $5,200 per year to spend on his business rather than on the insurance premiums.
CASE STUDY - Loss of rents claim win!
Phillip has a rental property and his tenant who had had a 12 month lease was shifting out in three days and was in cleaning mode. After finishing the kitchen she left to spend the night at a friend’s place.
Unfortunately, somebody else decided they would take advantage and broke in to steal the hot water cylinder – which they disconnected but could not actually get out of the cupboard. When the tenant arrived the next morning, the water was ankle deep throughout the house.
The insurance company paid for a new floor, wall board, new carpet and drying out, all of which took about three months and more than $20,000. However, they refused to pay for loss of rents, saying that the lease was fully paid up for the remainder of the tenancy and no new tenancy had been completed - No new tenant, no rent actually coming in so there was nothing to reimburse.
After negotiations with the insurer they have now agreed to accept the loss of rents claim which will amount to in the region of $2,500. This negotiation was successful because the insurer was open to discussion, we had the knowledge and the expertise to put a valid case to them and we pay them enough premiums that they wanted to listen.
Landlords often need the rent coming in to service the mortgage, pay the rates, the insurance and many other charges which keep coming in whether there is a tenant installed or not. So when the rent stops coming in, cash flow becomes a very real issue indeed. When we chose the insurer to deal with here, we did not look at the price alone, we also made certain that we had a package which we could make work when it was needed.
CASE STUDY - Ensure you have the right policy working for you
Recently we reviewed the policy for a flooring business in town and found through our Advisernet connection we had a policy that could do the job better for them.
In doing that we reduced the premium by $300yr and lowered the standard excess from $500 down to $100.
The policy utilised is only available through Advisernet.
We did the same thing for an electrician in town - reviewed policy as theses people were price driven.
Again using a policy only available through Advisernet we were able to save them just over $300yr and lowered their standard excess from $500 down to $250.
CASE STUDY - Safe Lodgings
We reviewed the current policy and valuation of a Motel - what we found was the previous Broker had missed a section of the valuation report and in fact the Motel was under-insured.
This we fixed immediately and through our ‘Safe Lodgings’ Motel group scheme were able to save them just over $3000yr.
CASE STUDY - Income Protection
David was a 36 year old construction supervisor at a large building site in Wellington. He was recently divorced from his wife, and was the primary care giver of their five year old son, Richard.
One day at work, David slipped and fell awkwardly, injuring his knee. He was taken to hospital where it was determined that he would need knee reconstruction surgery.
Given the physical nature of David's work, he was forced to take four months off work to allow a full recovery from the surgery.
David had taken out Income Protection prior to his accident. As a result he was paid a Total Disability Benefit equivalent to 75% of his income, less any other disability income (e.g. ACC payments). This covered his rent living expenses and the cost of looking after Richard while he recovered.
Things to think about:
- Males suffered 76% of work related injuries in the year ended June 2003
- 8142 people were admitted to hospital in 2000/01 with knee injuries and averaged a stay of five days
- (NZ Health Information Service, Selected Morbidity Data for Publicly Funded Hospitals, 2000/01)