posted on March 14, 2016 07:52
Last week we examined one risk management strategy. We focused on the need to prepare for the unexpected by creating and/or building an emergency fund.
This week we look at another important risk management strategy – insurance.
When you purchase insurance, you transfer risk from you, the insured, to the insurance provider. In turn, the insurance provider agrees to compensate you should you suffer a loss. Purchasing insurance helps to better prepare you for those unexpected moments in life.
In the BVI, most people should be covered by some kind of insurance. Persons have access to health insurance through the National Health Insurance Scheme. Vehicle owners are required, by law, to have some kind of auto insurance. Many home owners also have property insurance, particularly if they have a mortgage attached to their property. Even so, many insured persons do not understand their insurance coverage. Often times, persons think they are covered for certain risks when, in actuality they are not. They are unaware of the exclusions of their insurance coverage and only learn about them when they need to make a claim.
This week, we are encouraging you to review all your insurance policies and make sure they are up to date. Do you know what you are covered for under each policy? Do you know what is excluded? Review your policies and determine if you are okay with your coverage, or if you need to make changes. If any major life events have occurred since you obtained your insurance policies (e.g. additional children or updates to your home), you need to consider if you are still adequately covered.
If you need to make changes, or have any questions about your policies, be sure to visit your insurance provider(s).
You should also keep tabs on what is available. Make sure that you are getting the best coverage for you for the best price by examining what other insurance providers have to offer.
If you do not have insurance but are interested in purchasing or learning more about insurance, do some research this week. Your goal should be to determine if you need insurance – if so, what kind(s) and what level of coverage. You can start by reading Insurance in the BVI, which was produced by us in collaboration with the Insurance Association of the BVI. It includes information about how insurance works, the different types of insurance in the BVI, things to consider when purchasing insurance and some general insurance terms. (To obtain a copy please contact us.)
Before you purchase any insurance policy, make sure that you shop around for the best offer for your situation. Also ensure that you are working with a licensed professional. A list of licensed insurance providers in the BVI is also included in the guide.
Your prescription for Week 8
- Review your insurance policies to understand your policy (i.e. what you are covered for and any exclusions that may apply)
- Make an appointment to talk with your insurance provider if you have any questions about or need to make any changes to your policies.
- Investigate other insurance providers’ offerings to know what else is available.