You Are Now Uninsurable!

These are the words Tom, my insurance broker and consultant said to me a month or so ago when I told him I had Prostate Cancer. Not too long previously I had reduced my life cover and the delay before I can claim on my income protection insurance from 2 to 3 months off work, against his advice I must admit.

By David Fletcher; Dominion

I have spent a fortune on Life Insurance and Income Protection Insurance premiums over the years and never once made a claim. We often debated whether we should drop them and thought about how much money we would have saved if we had put the same amount of money in the bank.

It turns out that there is some cover that I may be able to access from the Income Protection Insurance and I am working through a pile of forms at the moment to prepare a claim. I wouldn’t have known about this cover if it wasn’t for my broker Tom Fox of Canopy Group, for which my sincere thanks.

So far the gap between what Southern Cross has paid and my cancer related expenses is probably in the region of $15,000. A pittance compared to what some people spend on more difficult cancers. Of course I don’t know what’s ahead. I have a little sick leave up my sleeve so if I find myself feeling too tired or unwell to work as a consequence of the radiation treatment, I’m OK, but I’d hate to think of what my situation would be like if I didn’t have my insurances.

So here’s the thing. Insurance is a grudge purchase. We don’t expect to claim and the insurance companies hope we won’t. That’s how they make money and that’s why as you get older the premiums keep going up in proportion to the risk. It’s often the first thing to go when times are tough.

We do have public health, but chances are if I had to rely on it, I would be on a waiting list while the tumors grow and the likelihood of being able to get treatment outside of my work hours is probably next to zero in which case my job could have been at risk. I must say my employer has been fantastic and very supportive which is awesome, but financially its my burden.

I cannot get buy any new insurance, I can’t ever increase my cover. So here’s another piece of unsolicited advice from me:

If you are in your 50’s (and I have lost friends much younger from cancer and other conditions) get yourself some cover before you have the PSA test, so that you can honestly say that you have no known conditions, because you don’t. As soon as it is on record with your GP or specialist that you have cancer, it’s too late.

The Insurance Aftermath of an Earthquake

First there were several people who had inadequate insurance in Christchurch. I have no idea what the situation is in Japan, but I understand that some of the worst hit were apparently poor communities illustrated by the ease with which the  tsunami washed away the houses.

I think the first thing goes back to my previous blogs on preparation lessons, the aftermath and getting your household ready. The Earthquake Commission is there to help after a natural disaster which isn’t covered by normal household insurance. But the scope was huge. They had over 440,000 claims and even in dealing with those, their liability is up to a maximum of $100,000 for dwellings and $20,000 for personal property. Try building a house for $100,000 or replacing even your basic possessions including appliances, furniture, clothing etc for $20,000. Some people will pretty much walk away with nothing.

Now insurance itself is a risk game and they take our premiums on the expectation that for a large number of people they will never have to pay out. Now I haven’t seen the financials for EQC, but I suspect that most of the money has gone into running the organisation over  the years, especially given that after the event John Key says that the government may have to treble the levy in our taxes for future incidents. Does this mean that we are now going to start to pay for what happened, borrowing from the future because the funds weren’t there? Are wee robbing Peter to pay Paul?

We always knew a major disaster looming. Of course we thought it was most likely to happen in Wellington. It hasn’t, which of course doesn’t mean it won’t because Christchurch and Wellington are on different fault lines. But I would have thought with years and years of taxes and no major incidents, EQC would have been flush with funds.

Anyway, back to the present. If you don’t have adequate insurance to cover everything, think again and do what you can, even if money is tight, things could get a whole lot worse. I hate insurance. I was once asked to do a whole lot of psych tests by an insurance company who thought I would be a star life sales person. The idea of selling life policies to my friends was anathema but I loved tests, so I spent a whole day doing the tests and they came back apparently saying I would be hugely successful. I declined despite the offer of a big package. Today I wonder if I should have taken the money, because I better appreciate the importance of insurance. It’s a gamble by both parties, both hoping we will never be in a position to need the cover.

I have life, income protection, health, car, house and contents policies and it eats up a lot of money. So far the insurance companies have enjoyed a lot of meals from my table, but if something major did happen, I feel secure that if my company closed for 6 months because its buildings ceased to exist, if I was injured or ill long term, or if my house washed away in a tsunami, I could rebuild. As the Dean of Christchurch Cathedral said, its the people that matter, the church can be rebuilt.

One concern I had with the aftermath was seeing people throw away their household appliances, carpets, furniture etc and wondering how they would be able to prove what they had lost. The share scale meant that many people had to do that, but it does show the value of having a list of your possessions and also photos. I once had a software app that did that, but never fully used it. Another thing to my be prepared list methinks.

 

Household devastation after the earthquake

So I recommend you grab a digital camera or video camera at least, so that you can go through each room and record your possessions and the state of your property, so that you will have proof in the unlikely event that you could need it. Then store the information somewhere safe. I used to keep my songs in safe deposit on video, with the bank, some people thought I was stupid, but again its just insurance.

Enough for now. I hope I’ve given you some more food for thought. Here’s some fond memories of mine of Christchurch a couple of years ago, with a song I am still writing.