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Insurance does not replace commonsense

Posted by Andrew Cox on 30 December 2011 | 0 Comments

Tags: Insurance, uninsured losses, claims, lost time, lost income, business interruption, risk management, maintenance

It is impossible to insure against every eventuality. Even if you could, would you really want to suffer the inconvenience of post-loss stress and the time spent in dealing with the consequences of loss? In fact, insurance is one of the few products that most people and businesses buy and yet most do not ever want to use it because of the post-loss hassle.

it is also true that fewer losses equals fairer premiums. Thus, insurance should be regarded as a financial safety net that operates only when a disaster happens even after every precaution has been taken. Insurance should not be regarded as some sort of bank that provides cash whenever something breaks.

So, what can be done to avoid having to make a claim?

A good place to start is by using your commonsense. For example, a worn electric socket often sparks when operated. Instead of waiting for it to fail permanently or maybe catch fire, why not correct the fault immediately? Or your car...why wait for an MOT test to tell you that one or more lights are not working? Replace the bulbs as soon as the failure is noticed. That way, you will be better seen in poor light and maybe avoid an otherwise inevitable accident.

Remember the basic insurance principle that you are expected to act at all times (not just at renewal!) as if you are uninsured. How would you act if there were no financial safety net? Take a look around and use your commonsense; if something starts to worry you, take action!!