You will know what risks you have, you will know what funds you have available to meet those risks and you will know if you want to seek the protection of insurance cover to help with any incidents that occur. It is usually an easy choice to say “yes, I need insurance to cover emergencies” but as the cost of insurance can become a large part of your budget, you need to balance risks and costs.
You cannot predict if you will have an accident in your car, if you will suffer loss in a storm or earthquake or when you will die, but with insurance you can ensure that these events and their consequences are provided for.
You could ensure that your family is able to carry on living in your home by having life assurance to pay off the mortgage should you die, or credit insurance to pay it if you cannot. These are not things people like to consider, but by asking “what if bad things happen?” you may decide that it is worth paying for cover to provide a family income should you not be able to provide it, or to provide temporary accommodation if your home becomes uninhabitable.
Some other questions to consider:
1. Do I need this insurance coverage?
As stated previously this is usually a personal choice, unless required
2. How much coverage will I need?
Again this will be dictated by the need. For example, if you insure your home against damage, you must insure it for the full value, or any claim may be rejected or limited in the future
3. What exactly will this policy cover?
It is always worthwhile to ask for a sample policy to review BEFORE taking out insurance. It may be bothersome to read a long document, but it will explain what’s covered, what events are insured against, what the claims process is, what standard restrictions apply and all the other really important things that may slow or stop a claim in the future
4. What won't this policy cover?
This will be in the sample wording, and it is always wise to ask about it before taking out a policy. It is worth noting that there will never be a full answer available here, because it is always impossible to define all situations. If something is not included in the policy you will be unable to make a claim on it. If you really want to insure against a polar bear emptying the contents of your freezer while you’re away (however unlikely this may be in the BVI) you should check that this is included in the policy.
5. What is my premium and how often do I need to pay it?
This will be negotiated and agreed with the insurer, by you, the insurance broker or the insurance agent.
6. What is the term or length of this policy?
This will be negotiated and agreed with the insurer, by you, the insurance broker or the insurance agent.
7. What would invalidate this policy?
This should be in the sample policy mentioned above in 3. It is always sensible to ask for this information prior to buying the policy.
8. How will claims be handled?
This should be in the sample policy mentioned above in 3, and you should ask for this information prior to buying the policy. The Financial Services Commission intends to survey the insurance companies and agents in BVI, to enable us to put more information on claims handling on the website.
9. What is the deductible?
This is the amount of each claim that you agree to pay. It is also called an excess, co-payment or co-pay. Even if you have an incident that causes damage that costs less than the deductible, most policies require you to advise the insurance company of the incident and cost.
10. What else do I need to know about this policy given my particular circumstances?
The key points all relate to:
- What items are insured?
- What things can happen that I can claim for?
- What things can stop me claiming?
- What things could invalidate the policy?
- What must I advise the insurers about?
11. Do I need to buy this insurance or am I already covered by an existing policy?
This is very important as you may find that your insurance policies state that claims must be made against the proper policy and that if you have two policies covering the same risk (except permanent life insurance) you may not be entitled to claim for the damage or loss.
12. Is there another insurance product that I should consider which may better suit my needs?
You will need to research this yourself or seek professional assistance from an insurance broker, agent or company.
In the BVI, insurance companies, insurance agents and insurance brokers are authorized and regulated by the Financial Services Commission, allowing them to provide or assist in the providing of insurance contracts. These companies offer many types of insurance to cover a range of risks. Before you buy insurance, it’s very important to read the policy to understand what your policy covers.