Accept that the amount of insurance you carry should be based on the value of what’s being insured. It’s interesting to see how people judge value. Value is in the eye of the beholder. A photo, which has no monetary value and is irreplaceable, might be priceless. A large building which is being used only because it exists, has an obvious physical value, but might be worthless to it’s owner, it’s loss of no significance. The loss could even be viewed a beneficiary because it was not valued and now has been removed.
When you enter into an insurance contract, value becomes something tangible. The contract will state the basis of valuation, and there are terms such as assessed value, cash value, actual cash value, depreciated value, replacement cost, agreed value, etc. The term used will vary with the type of contract. Life insurance has an agreed upon value. Car insurance has (usually) cash value. Property insurance can be Replacement value, but it can also be assessed value or actual cash value.
People always overvalue an object after it is lost, and undervalue it when purchasing insurance. The reasons for doing this are obvious. What’s interesting is how value can be made to mean anything you want it to be.
All travel plans contain exclusions for pre-existing conditions. Cautious by nature, insurance companies tend to sweep exclsuions from a policy even if they are not justified. It’s quicker to sweep than investigate. A recent case we had involved a client who had all cardio-vascular conditions excluded from their travel insurance even though they had their doctor submit a medical report. We advised the client to have their doctor submit a follow-up letter to clarify their condition in the belief there was a mis-understanding about the patients health status. As a result the company reversed it position and removed the exclusions. The client is happy. We are happy we were able to help. And the company is happy that, with the correct information, they were able to properly assess the risk. It was a win-win-win!
Insurance companies rate based on known risks. Unknown risks are a problem. The more information they have, the better able they are to rate a risk, and if possible, include the risk in their coverage. In the absence of knowledge, they will always sweep the risk away.
Hopefully there is something of interest to read here, and if it sparks some thinking or a question, then hopefully you will follow the link or ask us to find one for you.