A question about Insurance

TBAM · Nov 20, 2008

Big Mike:

I can understand where you're coming from, and it kinda sucks for me, however look at it this way

I probably Paid $1200 over 2 years for coverage.

Through those claims they have paid me almost $20,000.

The majority of that $20k was due to theft's where there was no forced entry. So basically, there is no evidence of anyone breaking in, no evidence of theft other than the items not being there.

What some people don't realise is that Insurance money doesn't come from nowhere, it comes from the people paying the premiums. It's a pool of money that is managed by an Insurance Company.

If I've only paid $1200 and they've paid me $20,000. Where's that money going to come from? Other people's premiums.

However because that is the point of an Insurance company, all they have done is increase my premium, by maybe $20 a year and put a condition on my policy, which will help prevent any theft's without forced entry.

The people that don't claim because they're worried about their premiums going up are either motor vehicle customers (that use a no-claim bonus), or people who aren't familiar with Insurance.

For example. If I both breakins had proof of forced entry, then I probably wouldn't have been investigated, the premium wouldn't have gone up, and there wouldn't be a condition on my policy.

So for $20,000 all i've had to pay is about $400 in excesses, $20 extra per year and put extra locks on the house.

I don't think that is too unreasonable.

Big Mike · Nov 20, 2008

I agree...and like I said, I do see why they do it that way. Plenty of claims are much more than the people have paid out and the money has to come from somewhere. And those are the times when it is really good that we have insurance.
I'm still biased against insurance companies because I had to pay huge premiums as a young male driver.

It's much better now though.

chrisburke · Nov 20, 2008

in talking with other people, i get the idea that a lot of people are in the same boat i am, where they dont really understand what their insurance covers, nor what they can get from having insurance.. as I think back to high school, i had a very expensive guitar that was in its hardshell case, that got knocked over accidentially by another student and was destroyed (the head smashed to pieces)... i have a feeling in reading what you guys have posted, that i could have had my parents insurance cover this for me instead of having to buy a new guitar myself

TBAM · Nov 20, 2008

The best advice I can give you is read your policy booklet cover to cover and for any points you are uncertain on, call your Insurance company and ask to speak to an underwriter or someone who can clarify insurance terms for you.

They will probably not be able to answer hypothetical questions surrounding claims (as their word is their bond, and even if they are wrong, if they give you the wrong advice you can hold them to it).

My drumkit is worth approximately $13,000 AUD, I don't have to specify it on my policy as my policy covers general contents up to $20,000 AUD per item.

Wheras, some companies may consider a musical instrument such as a drumkit as a valuable item, which under my policy (if it was considered a valuable) would be limited to $1250 AUD per item up to a maximum of $7500.

So it differs from policy to policy. Your guitar may have been covered, but there's an equal chance it may not have been. Most people only purchase a listed events cover, which is a policy that only covers a list of events. If it is not one of those listed events it is not covered.

Most listed events policies do not cover accidental damage, unless the item is specified.

Anyways, as I said, read your policy booklet and if in doubt, call a broker Insurer or someone who knows what they're talking about.

Or, even better, come on here and ask me if you like.