The power of insurance: home, contents, vehicle and health

How important is insurance and how can I get it?

In light of the region’s recent events, we thought we’d share a quick-read blog on the power of insurance and why we believe it is an essential part of financial planning. 

It is important to note that at Mortgage Sure, we do not sell or advise on specific insurance products, but instead we like to share and help educate our customers on the top line information for insurance – what exactly is insurance? How does it work? How can you find an insurance solution perfect for your needs? And how do you go about purchasing it?

We do suggest you continue your own research after this blog before making any purchase decisions and have provided links for more information and contacts, should you wish to investigate this further.

So, for starters, what exactly is Insurance?

Insurance can come in many forms and is a way to protect yourself, your loved ones, and your assets from unexpected events that can have a financial impact.

In legal terms, it is a contract between you and an insurance company where you pay what is called a ‘premium’ in exchange for coverage in case of specified events, such as accidents, illness, theft, or natural disasters.

Are there different types of insurance?

Yes, there are many types of insurance that you are able to obtain for yourself, your family or your business and each type is designed to cover specific risks. The 2 key types most important to our clients are:

Personal risk insurance:

Personal risk insurance provides protection for you and your loved ones against serious illness, injury, disability or death. This type of insurance encompasses a number of different products or ‘benefits’ and can be bundled together to provide cover appropriate for each individual. The major benefits are

1. 1. Life Insurance: pays a death benefit to your beneficiaries in case of your unexpected death.
   2. Trauma or critical illness insurance: pays a lump sum if you suffer a critical illness or injury. This includes, cancer, heart conditions, strokes or major head injuries
   3. Income protection: Provides a monthly payment if you are unable to work due to illness or injury. Designed to replace some of your income while you’re recovering.
   4. Health insurance: Cover for private healthcare in the event that you want to skip the waitlists common in the public system. Health insurance can also cover the likes of doctor visits, specialist appointments and even optometrists and dental visits.

Fire and general insurance:

1.   More commonly referred to as house, contents and car insurances. This provides protection against loss or damage to or caused by your assets
   1. House insurance – this type of insurance is key to our clients and protects your home from damage from accidents or natural disasters. There are a wide range of policies to meet different requirements, depending on your circumstances, which vary in cost and terms and conditions. 
   2. Contents insurance – this covers specifically the contents within your home or living situation. In this type of insurance, you are required to detail key contents and the value of these.
   3. Vehicle insurance – this covers damage to your vehicle and potentially damage to other vehicles caused by you

Purchasing insurance is entirely a personal decision, and the types of insurance people obtain will vary depending on their circumstances. 

Many people may have hesitations to purchase insurance due to various reasons, but a key reason is the cost of insurance premiums. Depending on your home, contents, vehicle and assets – insurance premiums can certainly be expensive. Of course, there is also the mindset that it is a ‘cost for a perceived low risk’. This meaning some people may think that the likelihood of an event occurring is low, and no insurance is required. While this may be true for some, as we have seen from recent events in Hawke’s Bay, when the time comes to make a claim, you can never have too much cover.

What are some of the benefits from insurance?

1. Peace of mind – the concept of having insurance there, can give you peace of mind, knowing that you and your loved ones are protected from financial losses, if in the unfortunate circumstance, you require them.
2. Financial security – insurance can help you protect your finances and assets in the case of any unexpected events. 
3. Protection of assets – You can be rest assured that insurance will help protect your assets, such as your home, personal items, car and business, from damage or loss.

You may at times, also require insurance for compliance reasons. During the peak of COVID-19 times, travel insurance policies were mandatory for entry in specific countries. 

Who can help me?

We have compiled a bunch of helpful links that will help you with your research in learning more about insurance, as well as a couple of our reliable Insurance Broker contacts, who we deal with for home, personal and vehicle insurance on a day-to-day basis. If you’re interested in speaking further, reach out and we can put you in touch. 

1. Life, Health and Disability Insurance: Rod Dalzell at Muny4U Limited
2. Fire & General + Business Insurances: William Horvath at ICIB

Our advice to you is to put some time aside to do your research – evaluate your risks, understand your insurance needs, and choose the right coverage to protect yourself and your loved ones.

While we’re home loan experts, our blog posts are for general information purposes only and are not intended as financial advice. If at any stage you need personalised advice, get in touch on 06 8788 4444 or Ben or Mark.