Contents insurance — if it isn’t snapped, it isn’t a cinch

You’ve got contents insurance, so you’re all sorted – right? Well perhaps, and perhaps not. The question is, can you prove that you own the items you have covered in your policy and are Cameraclaiming for?

It’s easy when you have accidental damage, like your mobile phone slipping out of your pocket and into the toilet (a claim far more common than you would think). You still have the phone – unworkable – but it is physically there. However, what happens when a burglar comes into your home and takes your stuff is a bit more complicated.

We recently had somebody break into our house, while  we were asleep. We woke up the next morning to find the front door open and my car gone (with my sunglasses in it). Theft of your car is easy to prove, but my sunglasses would be difficult. You may know they were in the car, but how does the insurance company know for sure that you’re not trying to rip them off for a pair of sunglasses you’ve never owned?

Fortunately I had a photograph of my sunglasses, and a receipt from recent repairs I had done to the lenses. Both items were sufficient proof of ownership — either one alone would suffice.

But, let me ask you, this do you know what type of TV you own? Make and model? Most people won’t know the answer.

You’ll have to know that information if you want to claim for it. At least have a photograph, the TV manual and even the remote that belongs to the television. The insurer will want to know when you bought it, how much it cost, was it new or used and what the replacement value is.

The same applies to items like jewellery and cameras. Ironically, claiming for stolen make-up is a bit easier because every insurer presumes that all women own and use cosmetics, but the same rules do not apply to your lawnmower.

My advice is to e.g. throw all your jewellery on the bed and take a photograph of it. Keep you receipts, repair invoices, warranties and manuals if you can. The easiest thing is to take a photograph and store it in your Gmail or some other safe offsite place – whether you email it to your Insurer/Adviser or save it in Dropbox.

As a footnote to the story of my sunglasses, it was those same sunglasses that were instrumental in catching the person who stole my car (it was classed as a home invasion because he broke in while we were in the house).

The police found my sunglasses in his house and it was enough to bring him to book for the car too. And we got the car back too!

Landlords – how do you protect yourself against the risk of meth labs on your property?

Landlords were no doubt left feeling queasy by recent reports of P (meth) lab raScreen Shot 2016-02-09 at 7.44.50 amids and headlines like ‘soaring cost of meth-tainted housing’, but there are comprehensive steps property owners can take to protect themselves – the answers, however, aren’t simple.

As it stands, depending on your insurer and the exclusions in your policy, you may be protected from meth lab damage to your rental property – at least in so far as your sum insured amount – with the standard property / building insurance and a landlord’s extension. Then again, you might not.

The landlord’s extension to the standard property insurance will usually cover damage that is not deliberate or malicious (bearing in mind that policies differ). Provided
you’ve been able to prove that you have done your utmost to exercise due diligence and caution around protecting your property e.g. regular inspections and or communication with your tenants, your standard policy may protect you from meth damage.

I had a client recently who maintained meticulous records of her rental property inspections – right down to the mileage she travelled – and all her communications with the tenants were on record. As a result, $19,200 of her original claim for $22,000 of meth damage to her rental property was covered. The reason being that it was not an ongoing problem and was deemed to be accidental damage in terms of her policy (and thanks to her conscientiousness).

Her claim included lost rent for the weeks she was unable to rent out the prope
rty, as well as two inspections and decontamination treatments. Damage to the property was mild, by comparison to some and could of course have been a lot worse.

In this case, the level of contamination was higher than acceptable, but not through the roof e.g. the stove had very high levels of contamination, and the tenants were obviously smoking meth in the bedroom. Testing and decontamination was about $15k, because they had to do it twice.

For some extra ‘peace-of-mind’, a landlord can also take out a specific landlord’s cover, but policy conditions and events covered are very specific. This type of policy may include – for example – up to 8 weeks loss of rent if the tenant skips, or $30,000 worth of cover for malicious and deliberate damage (unlike the conventional policy that excludes wilful damage). The cost of this policy averages around the $300 per year mark.

A standard property insurance, together with the landlord’s extension — which makes it clear that the occupants of the property are tenants – plus special landlord insurance against malicious damage (e.g. meth labs), will cover most of your bases and protect you right up to sum insured stipulated on your policy documents.

The important thing however, is to make sure you are making every effort to exercise proper care and maintenance of your property, whether that is hiring a property management company, or keeping an eye on the place yourself. Failure to do so could result in your standard insurance claim being declined – there are specific sections in all policy wordings that say you must do this and it could make things sticky at claim time if you do not.

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‘Tis the season for petty theft

As we move into November, it’s a timely reminder now to ‘mind your stuff’ – as the weather warms up there will be an increase in petty theft. Minor property damage also rockets up more than 20 per cent over the summer months.

At this time of year, those of us in fire and general insurance in Auckland are bracing for a sharp increase in claims resulting from opportunity theft, as well as losses and damage to personal property as Kiwis move outdoors.

It’s the season for petty theft. More Kiwis are on the beaches, so they leave their mobile phones, sunglasses, handbags – that kind of thing – unattended. Thieves target the beaches in summer because people are relaxed and less vigilant. There are also more vehicle break-ins.

Another problem is that outdoor activities like fishing, kayaking, boating and swimming results in broken sunglasses, water damage to mobile phones and people simply forgetting their stuff in the change rooms, for example.

It’s the inconvenience factor of stolen handbags and phones that really gets under the skin for most people. A lot of them discover, belatedly, that their insurance doesn’t cover a lot of these things, or the excess is too high to make it worthwhile claiming against.

Insurance policy limits can also catch a lot of people by surprise.

An example of a sub limit that may apply is that the insurance policy won’t cover you for theft that results outside your main dwelling, for instance, or which makes you pay higher excess.

The fact is though, that losing a $200 pair of sunglasses still hurts. It hurts the back pocket, it causes distress and inconveniences and it hurts even more when you think you’re covered and you discover you’re not – it puts a bit of a damper on the holiday.

Even more aggravating is being unable to prove ownership.

Insurance companies require you to prove ownership. If, for example, you’ve thrown away the box and the receipt, you can still provide a photograph, or Facebook screen shot, of you wearing or using the item. But if you can’t prove ownership you’re in for an uphill battle with the insurance companies.

I’ve had someone submit a TradeMe receipt as proof of ownership, and that was fine,” he said.

Here are some steps to help keep the holiday cheerful:

  • Have proof of ownership handy e.g. a photograph of you wearing your sunglasses or wristwatch
  • Ensure you have the correct cover for your outdoor pursuits, and that the cover meets your expectations e.g. be aware of policy limits, excess and sub-limits
  • If possible, be able to provide proof of value. If your handbag gets stolen, it may be difficult to prove the value of your make-up, for example. In that instance the insurance company will revert to a second-hand value pay-out
  • Lock valuable items in your boot, or out of sight
  • Ensure somebody keeps an eye on your stuff at the beach

These are simple steps you can take to ensure that your holiday is not interrupted by petty theft or the inconvenience of lost or damaged property. They’re little things, but it’s the little things that count.

WoF and CoF issuers must have professional indemnity and public liability insurance – NZTA

Auckland, New Zealand., As at the end of last year the New Zealand Transport Agency holiday-car-rentalintroduced new regulations that require companies that issue vehicle WoFs (Warrant of Fitness) and CoFs (Certificate of Fitness) to have public liability and professional indemnity insurance in place.

Essentially, the public Liability and professional indemnity insurance for companies issuing WoFs must be sufficient with regard to the activities the organisation has been appointed to carry out.

Businesses that issue vehicle CoFs must have public liability and professional Indemnity insurance with a minimum level of cover of $1 million.

Where a company issues a WoF or CoF, that company is certifying that a vehicle is safe to drive on the road. If something happens, the wheel falls off for example, and an accident results causing the death of a third party, accountability may be traced back to the company that certified the vehicle as being safe for the road.

A driver can turn around and say he or she had put their trust in service centre to ensure the vehicle met safety requirements.

If, for example, an inspector was negligent or missed something, the public liability insurance will cover the damages. However, if financial loss results – for example to the vehicle or in lost earnings – this may only be a loss that is covered under a professional indemnity insurance.

Businesses issuing WoFs and CoFs must comply with those requirements, they have no choice.

Insurer AMP (the policy is underwritten by Vero Insurance) has identified a risk to the vehicle inspector and have added a professional indemnity option to the public liability insurance – an all-in-one package for much less the cost than having two separate policies.

This includes $500,000 professional indemnity cover for $600 per year, compared to regular policies which cost between $1000 to $1500.

Introducing Crash Management: Free, convenient, an absolute pleasure

If you don’t know about Crash Management’s services, I’d like to point you in their direction because I’ve just used their services myself (after a minor collision) and they made my life a lot easier.

Crash Management is a business that takes care of all of the hassle from woe to go, and it won’t cost you (or your Insurer) a cent.

They will collect your vehicle, provide you with a free loan car, select an accredited repairer nearest you and valet the car when it’s done, before returning the vehicle to you.

Once I had lodged a claim with my insurer, I called Crash Management and gave them my claim number and they took care of the rest, including sending me an online link where I could watch the progress of repairs and receive an anticipated delivery time.

The service is funded by crash repairers but, unlike going direct to most crash repairers, you won’t be charged for your loan car and you will get a free, late model vehicle.

Vehicle insurance: don’t let changing circumstances catch you with your pants down

One of the biggest stumbling blocks for people who have vehicle accident claims – and a cause of extra cost or delays – is failing to inform your insurer about change of user or purpose.

For example, when you took out your car insurance your children may not have been old enough to drive and you would naturally have excluded under 25s from your policy. Your children grow up, and suddenly your son uses the car daily to go to university… and that’s where the trouble begins.

Perhaps you were employed when you first took out your policy, but since then you have decided to go out on your own and start a business. This means your vehicle is no longer being used for private purposes, but for business… and that’s where the trouble begins.

The consequences of not changing these seemingly small details include having your claim declined, delayed or the difference in premiums (that you should have paid) being deducted from the total claim amount due you – all in all it’s harder on the back pocket and very inconvenient.

Most often the biggest delays come from crash investigators who may go as far as to request your cell phone to see if you were texting. They could investigate social media and even interview people at, for example, the function you or your son or daughter attended.

I have seen what staggering levels claim investigators – many ex-police – will go to in order to see how often your son uses the car, even asking the driver of the other vehicle whether he/she smelt alcohol on the driver at the time of the incident. They will write their own reports and request police incident reports –- all of these impact on your desire to simply see your car back on the road again.

The long and the short of it is to remember to regularly review your insurance cover and make sure it is up to date with your changing circumstances.

House & Contents Insurance: Will your insurance company pay to clean your house?

If your house has been flooded, most insurance companies will pay for the clean-up and any other flood damage mitigation steps you may have to take.

I recently had a client call me over the weekend because the lower level of her house was flooded. I advised her to get a cleaning company in – even over the weekend – and let them use their industrial dryers to get the place into shape. The fact that it was over a weekend and possibly more expensive was not important because it was an emergency.

The cost of the clean up is included – provided the claim is accepted in the first place (which it will be if you’ve taken out a reasonable policy) – because cleaning and drying the property helps to minimise flood damage.

Other actions, such as punching a hole in the wall so water can escape, hiring a pump or dumping rubble to channel flood water away from the house will also be covered because, again, you are minimising your flood damage and ultimately, how much the insurance company has to pay out.

The most important thing is to make sure you have good house and contents insurance because house flooding is becoming more and more prevalent. Our drainage systems aren’t coping very well anymore, and of course changing weather patterns – increase in heavy rainfall and weather bombs – are heightening the incidence of flood damage (clay shrinkage after dry weather also raises the risk of flooding).

One final tip, when taking out a house and contents insurance policy, make sure to check what excess you will be required to pay when you claim or cold water won’t be the only shock you get.

A string of pearls and the insurance ombudsman

It makes my blood boil when I read journalists and other financial gurus advising people to ‘take it to the Insurance and Savings Ombudsman’ if you’re not happy with the outcome of your claim. The reality is that taking a claim to the ombudsman is extremely complex and not a ‘given’. storm

The Office of the Insurance and Savings Ombudsman is a last resort, and will only look at you when you present a letter of deadlock from your insurer. This is a literal, physical letter from your insurer advising you that they will not budge, and neither it seems will you, so the claim is at deadlock. Only then will the Ombudsman consider your claim – but there is plenty of water that has to go under the bridge before then.

The Office of the Insurance and Savings Ombudsman will insist that you exhaust every avenue, every process and every appeal available to you through your insurer before bringing the issue to them – they must be convinced that you have exhausted every avenue with your insurer, and the letter of deadlock is evidence of that.

Very few cases go through to the Insurance and Savings Ombudsman, because the insurer is always going to try and resolve it. If the call is marginal, they will err on the side of paying out the claim because it does not look good for their reputation, and they would far rather avoid the time and money involved in the disputes resolution process.

A client of mine recently had her house burgled, and a string of pearls was stolen. The pearl necklace was originally owned by her mother and was purchased in the 1960s. The insurer offered a pay-out of $300 because, they said, pearls were expensive in the 1960s and it is unlikely her mother could have afforded to buy an authentic string of pearls.

I called the insurer up and asked them if they really thought they could win this in court. Did they seriously believe a court would accept their guess that the pearls were not real when they had absolutely no knowledge of the client, her mother or their circumstances? They came back to me within four hours with a settlement of $3,000.

A declined claim is never the end, and the Insurance and Savings Ombudsman is always a last resort. Most often these things can be settled amicably by following the process with your insurer.

Are your children covered by your New Zealand insurance policies?

First off, always ask your insurance company or broker when something changes. Always inform your insurer, no matter what.  family of four on grass with hands up

  •  When your children leave home to study – in Auckland or Wellington or Dunedin – are they still covered by your home and contents insurance?
  • When your children drive your motor vehicle, are they covered by your motor vehicle insurance?

Home and contents

If your son or daughter leaves home to study and goes to live in university accommodation, he or she could still be covered by your home and contents insurance policy, within certain conditions. The criteria varies from insurer to insurer, but commonly you might find that there is a limit on their cover, for example, up to $5,000 is not unusual.

It is possible that there will be a couple of conditional changes to the policy that the average person might not be aware of. For example the policy could state that if a burglary takes place, there must be evidence of a forced entry. If items went missing because your son or daughter held a party, or the door was left unlocked, you may not be covered in this instance.

However, should your son or daughter leave home to go flatting or live off campus, they will in every instance I know of, not be covered by your home and contents insurance.

If your child is still living at home he/she will be covered by your insurance, and there is no time frame or age restriction on that. Your child could be 21 or 71 and still be covered. If somebody new moves into the house, like your daughter’s boyfriend, then you should advise your insurer and look to adjust your cover up to include the new person’s property. In all instances, it is best to inform the insurer and let the insurer agree to it in writing.

Vehicle insurance

If your child is driving your motor vehicle, which is still used as your own regular motor vehicle, then your insurance policy should still pay out. However, if you give the car to your child, and don’t change the main driver status with your insurer, you may well find yourself on the losing end of a claim.

One of the reasons is called premium prejudice, which means the change in premiums may be so large that the insurer loses out by not being properly informed about the change in ownership status. For example, it’s not inconceivable that while your policy costs you $400 per year, it would cost your son $1,400 per year. The gap between premiums is so vast that your insurer has every right to decline the claim. More importantly, the lack of notifying the Insurer of that driver change is non-disclosure – the insurer needs to know of the change in the risk to them and set the premiums, terms and conditions accordingly.

Also, make sure that you do not have exclusions on your policy, which you may have agreed to in order to save money. Let’s say your daughter was 14 when you took out the policy and the prospect of her getting her full drivers license was still some years off. To save money you agreed to excluding drivers under 25 from your policy. Then you forget about it and your daughter starts driving the car. You can see how that might be a problem.

Review your exclusions, or better still, give me a call to discuss your options.

Past indiscretions of yours or your family could deny you home and contents insurance

Applying for house, contents, car, business, etc. insurance isn’t always a given, or just a matter of routine. For example, previous convictions – even by family members that will be living in the home with you – may upset your chances of getting insurance, which is catastrophic if you want to secure a mortgage.

While there are several obstacles that could inhibit your ability to get insurance, it’s also not a given that those obstacles, like a conviction for example, would absolutely rule you out either – in other words, a criminal record can be a problem, and sometimes not, in the same way as owning an old pre-1945 house in New Zealand could be refused insurance, and sometimes not.

For example, if you are buying house insurance, there are two elements that the insurer looks at.

One is the property itself. The factors they take into account include location – if in Christchurch the issue can be complicated – but if it is an average Joe Soap home in Torbay, Auckland, the insurer may just want to know square meterage, age of the house, its location and the sum you want to be insured for (not that close proximity to water courses may also be an obstacle).

The second part an insurer considers is the client’s personal details. Dubbed a ‘personal profile’ test by some in the industry, you might find that the insurer may decline to insure you – even for house, car or contents insurance – on the basis of criminal convictions (including pending), and drink driving (in the case of car insurance), as well as if you have every had an insurance claim declined or renewals refused, experienced bankruptcy in the past ten years (may not be an issue if disclosed and approved by the Insurer) and any gang affiliations, etc.

The personal profile test does not only apply to the person applying and paying for the insurance, but extends to spouses, partners, parents and children, among others, who are also living in the home with you. The clause most insurers use sounds something like: ‘have you or any person to be covered by this policy…”

For example, I had a mother and father whose son was remanded to their home after a drug conviction. The parents wanted to put their son on the car insurance. The insurance company actually cancelled the parents’ insurance too, just because their son now lived there (and they were existing clients of the insurance company).

The best approach then is to get expert advice (from an insurer, adviser/broker as well as a solicitor) and make sure you provide full disclosure.

The Home Owner’s Guide to Fire and General Insurance in New Zealand

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