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Protecting Your Assets with Property Insurance

As long as you live ... "It's always something!" And in this case "something" such as a fire, flood or hurricane could destroy your home or investment property when you least expect it.

Prevention is far better than cure so build the best you can, board up if a storm approaches, keep a fire extinguisher in your house for fires, and use common sense in storing flammable materials such as paint and gasoline. Also when you consider a location for building - be honest with yourself about the natural drawbacks of that location, and if it is dangerous, perhaps consider another spot. If you cannot consider another spot, don't invest money you cannot afford to lose, as nature will win in the end.

After doing those common sense things discussed above, and if your budget allows, buy property insurance. You can select from several good local insurance companies. Each has it's own set of charges and items for which you can be insured, so it makes sense to shop around. Some companies do not cover wood houses others do (same for thatch, etc.). For some reason, most companies don't let you read their policies before you pay for them - I have asked and asked, but that is just the way they do it. Some of the local agents are quite knowledgeable and can tell you most of the details about the coverage, but in the end you are the one who should read and approve of the items you buy - so try to locate a standard copy of a policy by asking a friend who is insured, and read it through. If that doesn't work, most companies have a custom whereby they will refund your money if you don't like the policy after it is issued and you have received your own copy. Don't let this little quirk stop you from buying insurance.

Generally you begin with a standard "Fire Insurance" policy and to that policy you add special "riders" that cover other events. You can be insured for many things you may never have thought about. "All Perils" riders include some or all of the following potential disasters: Hurricane, Flood, Riot and Strike, Malicious Acts, Airplane Impact, Explosions and Volcanic Eruptions. None of them cover acts of war, or intentional acts of destruction by the property owner or insured party themselves (so DO NOT set your house on fire just because you want money for a new one ... ).

Each company has a slightly different way of structuring coverage and payments, but in concept these methods are quite similar. Basically, there is a "deductible" amount per occurrence, and then a percentage of the insured amount that is paid to the policy holder depending on actual levels of damage. Some people have no insurance at all and there are others who buy too much coverage. Buying too much coverage results when you 'include the total value of your home, including things that have little potential of being destroyed - such as concrete underground foundations. Assess your own home or building and buy coverage adequate to replace the part of the property that is actually vulnerable to destruction. You can also buy insurance to cover the potential loss and damage of your "personal items", such as your refrigerator, stove, tools, computer and t.v. This is called "contents" insurance and can be issued separately to people who rent an apartment or house, or can be added to the master policy for a property you own. When you decide on that coverage, first go through the house and list each item you wish to insure, except for art and jewelry which require separate appraisals and policies. Then put a replacement cost next to it, and take a good look at the item - ask yourself if the item is old and worn out. If it is, the insurance company isn't going to give you enough money for a brand new item to replace it, so perhaps this item is best left off your list. Once your list is complete it will be attached to your insurance policy. You should also take photographs of the listed items, and include a copy of the photos in that "safekeeping" package reviewed in last week's column. Send the negatives to your friend who is keeping copies of your important papers and have that friend put the negatives with your insurance papers.

Review your insurance policies annually, and see if you need to change any of the items covered. If you do need to do some updating, be sure to do it BEFORE hurricane season. Note on a calendar when your next payment is due, so you keep current and covered.

Last but not least plan ahead. If a storm is headed your way the insurance companies will NOT sell you last minute policies. Planning ahead is always the best "insurance" ........ whether for insuring your home, or for many other things in life. So think about it and as always, if you have a question. just ask. Next week have you done all you can to secure your home???

IF YOU WOULD LIKE MORE INFORMATION on buying property in Belize, or to contact Diane or her husband Bob Campbell, click here.

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