As we approach this year’s summer, amidst predictions that there could be a repeat of the disaster that affected hundreds of homes last year, many of us are continuously reminded of the need to take out home insurance policies. This is to help those who may find themselves enmeshed in the chaos for the first or repeated time, at least, to have something to fall back on.
While this campaign to get more homeowners purchase cover is a step in the right direction, the big issue is the whether many of them are able to afford the cost of home insurance premium. With the effects of credit crisis affecting the cost of everything on the face of the earth, the priority insurance deserves is, in the meantime, downplayed. Yet home insurance is not something that should be relegated or denied the proper attention it deserves.
Consider the plight of people, who as experts recently noted could have before them the options of either paying insurance premiums or putting food on the table for kids. They need to insure the property and content, just as they also must feed the children. The possible solution here is, as some experts suggest, is for brokers to bring down the premiums to the reach of people who really need insurance, but can’t afford it.
British Insurance Brokers’ Association (Biba) head of technical services, Peter Staddon recently observed the plight of people facing such predicament and suggested that home insurance premiums be priced in such a way that they would afford it. This is because homeowners faced with the choice of a number basics needs in addition to insurance, would easily go for the one they consider most desirable. But, according to him, they usually consider the level of risks they face.
In the case of those in areas where there is likely going to be a repeat of last year’s floods, for example, whereas purchasing cover is highly essential, if confronted by a more pressing need, they may go for the latter. Thus, the issue of cost is as important as the cover itself.
The solution for this class of homeowners, according to Mr Staddon, is for insurance brokers to make concessions. “The brokers should be able to say I can find a way I can get you some sort of protection and still put food on the table for the children, because that is the priority,” he suggested.
In dealing with this issue of pricing of premium, as much as home insurance is regarded as a social responsibility, the onus is still on the homeowner to take the first step. This could be in the form of indicating their interest and shopping around for the cheaper and possibly suitable options. While this may consume plenty of their time, it suffices if in the end the objective is achieved.
Another important thing to worry about is whether people living in rented homes bother to take out content insurance. Even as there is move in the UK to kick-start a campaign to encourage people in situations like this to insure their home contents, the price of premium will still be an issue.
However, homeowners or those living in rented apartments need to realise the importance of insuring their property and or contents, as the case may be. The floods of last summer sufficiently proved this. No one would wish a repeat of the calamity, but getting prepared for it well ahead of time is very necessary.
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