Do I need All Risk cover? Yes, you do unless you buy cheap sunglasses at the market, don’t own a laptop and own a pay-as-you-go el cheapo cell phone you don’t mind replacing secondhand out of your own pocket.
Like it or hate it, insurance offers you peace of mind against that “Oh no” sinking feeling you get when something goes missing or is stolen.
Picture it; you go for a swim and when you come back your backpack is gone; inside it, your cell phone, camera, sunglasses and a silk beach wrap you bought in Bali last year. If you’ve got All Risk, you’re covered. Now imagine you had slightly risqué photos on your camera and the telephone number of that hot chick you met last night on your cell phone. The shame! The frustration!
There are three main features of All Risks insurance that distinguish it from other types of home insurance.
- All Risks insurance covers moveable goods when you’re away from home (inside your home your goods, e.g., clothing, are covered by your home insurance policy),
- All Risks cover is an add-on to a household insurance policy, and
- It can be taken out for specified or non-specified goods (although certain high-risk items, e.g., a fur coat, perish the thought that you own one, must be specified).
All risks insurance, like any other insurance, has limits; it is up to you to ascertain whether the item you want to claim for was covered for and under what circumstances. Try as you may to convince your insurer, he probably won’t be impressed by a claim that you lost your TV set at the beach even though your TV has All Risks cover.
So what kinds of goods are we talking about? Handbags, sunglasses, binoculars, cell (mobile) phones, contact lenses, laptops, leather coats, watches, electronic diaries, calculators, etc., are all classified as All Risks goods. The basic options category of goods differs from the clothing and personal effects category.
The value of your moveable goods should be revalued frequently, especially items that appreciate or depreciate fast, e.g., jewelry will appreciate in value over time, but an outdated ‘ready rechner’ you use to calculate your fuel consumption when you fill up loses value very quickly.
Unspecified items are given a specific individual maximum limit by your insurer and a total maximum you can claim in a certain period. An excess will usually be involved as well.
When it comes to specified items, you need to explicitly insure them for their real value, bearing in mind that replacement value and market value are two different things. Functional things are pretty easy to replace; things of sentimental value are often in fact irreplaceable. In the same vein, while your two-plate stove may not seem very valuable to you, I would assume, seeing as you’re using a two-plate stove, that if it conks in, it would be important to be able to replace it.
If an item is worth more than the maximum value specified by your insurer, you must insure the item (if you want to be able to claim). Jewelry is a good example; you need to explicitly tell your insurer that your grandmother’s necklace is worth more than whatever value they would be prepared to give it as an unspecified item. (Also remember that you need to have proof of this; the fact you own the item and what its value is.) If you own a very expensive hand-blown glass vase from Malta, you won’t be covered by normal household contents insurance for the vase’s real value; that’s where specifying its value using additional All Risks cover comes in.
Personally, I would consider specifying all items I wish to ensure are insured for their full value. An easy way to ensure you are covered is to use a typical household inventory form that you can get from any broker to identify your moveable objects and assign values to them. Be ruthless in identifying those low-value items you don’t need to insure.
The most important thing you need to do when taking out All Risks cover is to make sure that every item is properly described, and it’s make, serial number(s), model, colour, distinguishing marks are written down. If you can, take photographs of the item.
Unfortunately, you can’t insure for inconvenience, and the loss of contact details on your cell phone or data on your laptop.