The uncertainty of a loss and its associated cost proves the relevance of an adequate insurance protection. However, just obtaining an insurance policy would not ensure that you are adequately compensated in the event of a loss. The need for you to know what your insurance policy covers can not be overemphasized.
As we continue our discussion on burglary insurance, we shall be looking at how a burglary policy can be worded to adequately suit your needs. Bear in mind that in the event of a claim, what usually determines the degree of compensation received is the interpretation of the clauses incorporated into the policy.
Insurance clauses serves three major purposes namely as an;
- Extensions: To expand the scope of cover of a policy on specific items or events,
- Exclusions: To reduce/limit the exposure of a policy by excluding specific items or events,
- Warranties: To impose a duty of performance on the insured which goes to the heart of the policy.
So, what are those relevant clauses to be considered when obtaining a burglary insurance cover?
- Hold-up Extension/Clause; In our last discussion, we stated that for a burglary claim to subsist, it must be accompanied by a “forcible or violent entry into or exit from the premises”. However, what happens when the violent & forcible entry or exit is not visible? When theft is accompanied by assault or violence or threat of violence irrespective of physical damage to the premises, it is regarded as “Hold-up”. be sure to request for this extension.
- Larceny Extension; This is robbery by way of fraud, deceit or manipulation. In our immediate environment, there abound cases of brainwashed robberies. A victim (having been subjected to undue influence) leads his captives to his premises and watch as his properties are being carted away (and in some cases assisting in the movement). However, such cases are difficult to justify hence, insurers don’t usually grant this extension.
- Single Article Limit (SAL): This clause states that in the event of a loss, no single item would be considered to be more than a certain percentage of the sum insured on contents under the policy unless such item is specifically insured. For instance, where the total value of your content was put at $2,000.00 and the SAL was fixed at 5%, it means that for any single item, the maximum you can claim is $100.00. One way to beat this is to declare from the onset such items and their values.
- Article of Gold Limit. This clause states that “the total value of articles of platinum, gold, silver, jewelry or furs shall be deemed not to exceed one-third of 33 1/3% of the total sum insured on contents unless specifically agreed with the insurer.
- Reinstatement Value Condition: This clause implies that in the event of a loss, the amount payable shall be determined by the cost of replacing a stolen item (of the same kind and type but not superior to or more expensive than the initial one). Where the item lost was specifically insured, the sum insured becomes the reinstatement value except it can be proven that same item and spec can be gotten for a lesser amount. Where it is not specifically insured and the particular model of item is no longer available in the market, the insured is paid the cost of a new one with a deduction for depreciation (or new for old).
It is imperative to state here that the above extensions are subject to payment of an additional premium. However, paying for them is one thing, your insurer’s perception about your risk is another. So, if considered too risky, you might be denied.
Thank you for reading. We would like to have your view and also know if this post has been of any benefit to you. Kindly leave a comment.