Asset protection helps us to insulate and protect our assets legally. Adequate asset protection should be in place before a claim or liability occurs since it is too late to initiate any worthwhile protection after the fact. At SFP, we sometimes advise clients to explore the option of using short-term insurance to protect their assets.

Short-term insurance can be very versatile because it can be taken out over the period that you need it. These policies can generally cover anything from property and household to travel and business insurance.

The clever thing about short-term insurance is that it caters to our ever-changing needs. It typically applies to assets that have their insurance needs changing over time. This is useful because the finite nature of the policy gives us flexibility. It provides cover without locking us into one standard of living. It allows us to upgrade our car or buy a new house without paying insurance on our old assets for the rest of our lives.

The premiums that we pay are worked out according to our individual risk profiles and the value of the asset that is being insured. Let’s say we are insuring a car, for example. Our age, gender, driving record, the value of the car, the area where the car is regularly parked and whether we have an anti-theft device installed are all factors that are taken into consideration when calculating the premiums that we will pay. Our previous insurance history is also taken into account, so the sooner we can create a reputable record, the better.

Insurance policies outline certain risks that will be covered should they one day take place. In this event, you will usually have to make an excess payment (a predetermined percentage of the value of the asset, or a capped amount – depending on the policy), after which the insurer will cover the balance of the claim. It is important that our assets are valued correctly as the insurance policy won’t cover the full balance if you are under- or over-insured.

Insurance can be very specific in what is covered and we should look closely at what we are insuring and how we are valuing our assets. For example, when insuring our home, there are generally three types of insurance.

Buildings insurance covers the physical structure of your home so that you’re covered if repairs are needed to get the house back in one piece. Home contents insurance covers your appliances, computers, clothes, books and furniture. And portable possessions insurance (sometimes called all-risk insurance) covers the things that are usually in your house, but are regularly taken out such as cell phones, laptops or designer sunglasses.

Insurance can get technical, but it shouldn’t be scary. After all, it is providing us with protection. If you feel that you need some extra protection, then let’s get in touch.