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In the process of
buying and selling real estate, you should consider insurance as one of
your priorities. Insurance is required for a variety of reasons and
purposes such as:
Once you have
purchased your new home, you should take out insurance to protect your
investment. So how much coverage should you have on your new home? What
does a basic policy cover? What happens if there is a fire or flood?
You should take out a
cover note on the day you settle on the property. If you are building a
home, you should ensure that they are covered from the day construction
begins.
There are basically
two levels of insurance cover:
- Replacement
cover - reinstates your property to it's former condition in the
event of it's being destroyed, i.e. new for old. Do not confuse
replacement value with how much you paid for the property. A home
bought for THB 4,000,000 may cost THB 6,000,000 to replace. It is
much cheaper for a builder to build several houses at a time, than
to construct just one.
- Indemnity
policy - reinstates or repairs the property but depreciation is
taken into account, i.e. old for old. You will only receive a
portion of the amount it would require to replace it.
Unlike car insurance,
there is little that is standard about home insurance. Premiums can vary greatly
depending upon the size of your home, it's features and location, and
the construction material. Do you have a security system, keyed locks on all
windows and doors?
| Maintain
your home: Check for loose roof tiles, electrical
fittings and etc.. Good maintenance reduces the
likelihood of damage or injury. |
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Many insurance
policies in Thailand do not cover your properties against "Acts of
God", such as lightning, hail, earthquakes and floods.
It is important that
you check your policy carefully before an unexpected event occurs.
Depending upon your
policy, the coverage is replacement value or actual cash value. For
example, if your THB 8,000 sofa is destroyed, full replacement ensures a
new sofa. Actual cash value would only give you the depreciated value,
say THB 6,000. Not surprisingly, full replacement policies are more
expensive than cash value policies.
In many cases, the
contents of a home are valued at 50% of the structure's replacement
value, e.g. on a THB 4,000,000, contents could be as high as THB
2,000,000.
| It
is a good idea to keep receipts for major purchases and
detailed inventory records for insurance purposes. |
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Bear in mind that the
standard content policy in Thailand does not cover you against burglary
and theft of your valuables, e.g. video recorder, computer, jewellery - for
those items you will need a
burglary
and robbery (special risks) policy.
In order to cover
your valuables against burglary and robbery, it is advisable to take out
a 'Special Risks' policy. For this type of insurance coverage, you will
need to provide a detailed list of all items to be included.
| As
well as keeping receipts for major purchases and
detailed inventory records, many companies recommend
taking video records or photographs of your valuables.
Limit your small claims: pay for minor losses yourself
and rely on your policy for more serious, expensive
claims. |
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Check out the various
ways to
improve your home security.
Your possessions
should be insured under your existing policy at your current home and
should be covered again when you have moved into your new home and have
notified your insurer. However, they are usually not covered during the
move between the two locations.
Check whether your
removalist offers 'in transit' insurance cover as part of their quote.
If not, ask them to arrange it for you or take out a policy yourself.
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