insurance

How many cups of coffee is peace of mind worth?

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My heart goes out to the victims of Mother Nature’s rough side: floods, fires, cyclones, hurricanes, earthquakes, tsunami, pestilence, you name it… but I’ll be blunt here, if you can afford to own a house, or at least be making the repayments, you can afford to insure it. Let me put it another way. You can’t afford not to.

Should disaster strike, yes, if you’re entitled to relief funds to cover some of your costs take your share but consider those who are in direr straits than you…

Philosopher Mouse of the Hedge recently posted Muse or Mushhead?, touching on aspects of disaster assistance. PMOTH’s response to my comment was “Your response should be a major blog post. It’s all the truth. Thanks so much for taking time to build it to such perfection.”

Below is my comment, and yes, by sheer length alone could be classed as a blog post…

“Great post, and valuable information. I feel terribly sorry for people who lose their homes due to any sort of disaster and I know it’s not a perfect commodity but you’re so far better off with house insurance than without it. It’s all about personal responsibility. In the last few years our house & contents insurance premium has increased by 350 % due to recent fire and flood disaster claims, and a change in the regulations around flood damage so policy holders are effectively covered without loopholes or gaps.

6 years ago we had a claim when the back outdoor area of our roof was blown by a mini tornado on to the house roof and also destabilised the framework of our outdoor area… Without that insurance policy we’d have been out of pocket thousands & thousands of dollars, trying to find contractors and may have suffered further loss… because the insurance company was worried with forecast summer rain the damaged roof would leak and damage the recently renovated interior of the 80+ year old house, so the work was completed in 25 days… in a rural area were we often have trouble getting contractors to ‘come out’… Ours was a simple, non traumatic lesson… if you can’t afford to lose your house, or the ability to live in it, you can’t afford to be without house insurance. If my old age pensioner mother-in-law can budget to afford it, anyone can.”

But wait… there’s more…

Our ‘disaster’ was mild, memorable and the best birthday present I’ve ever received. We’d already made plans for the G.O. with a mate during our holidays to paint our house roof at Taylors Arm to extend its life. When the same mate called with the news that half the back roof was on the front roof, the other half was in a neighbour’s back yard, and the State Emergency Service in order to make safe the loose sheets of iron were in the process of stomping over what was left…

I harbored misgivings at the thought of navigating the insurance claim process but well… you can’t look a gift horse in the mouth, can you? So, in I plunged, expecting the worst.

To my surprise, through a series of fortunate circumstances: local claim assessor 20 minutes up the road experienced the same mini tornado which took out his knock up shed; helpful claims processors in local region; forecast summer rain; and great tradies – especially the carpenters & roofers… by the time we arrived 2 days before Christmas, they were finishing up. That’s right, other than an initial quick visit, we weren’t on-site to manage any of it. I did it all over the phone & via email.

I know we had a beneficial context, there weren’t thousands of other claims going through and the insurance company recognised the potential & their liability for risk of further damage so mobilised resources quickly.

In a different and again non serious situation, my aunt and uncle who live nearby had a hail damage claim to a shed and awning that took 6+ months to finalise because it was low priority, during which time another hail storm did more damage, so the insurance company got lucky there.

I know the insurance company processes have a reputation as onerous and inefficient but I believe at critical times they work loosely on a triage basis, and while it may make little sense to us dealing with the micro of the fallout, they prioritise with a macro view of who needs when and how with what is available, but I grant of course, with one eye on shareholder dividends.

There is one point to all this… we had insurance cover. No matter how long it takes, if you have sufficient cover that is appropriate for your situation, at the end of the day you will get the help you’ve paid for. At the time of our claim we’d been paying for a year a premium that cost us per month less than the equivalent of 14 large takeaway coffees. Between then and now it’s risen to the cost of 48 large takeaway coffees.

Had we not had insurance cover, it would have cost us the equivalent of 5,714 to 8,571 large takeaway coffees to repair the damage ourselves when we were able to arrange contractors… for which we’d have had to sacrifice our savings or borrow, and in the meantime we wouldn’t have been able to use the house as the power was shut off until the damage was repaired, and we’d have been hoping tarping the roof was sufficient to stop it leaking.

Even calculating ongoing insurance payments from then to now, the premiums have only added up to the equivalent of approx. 2,187 large takeaway coffees… which we look at as retro payment for the new roof, and an ongoing cost of the price of peace of mind.

Mini-tornado flattened whirly bird
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