Diverse International Risk Management

As a Loss Adjuster, my advice to policyholders before the onset of the rainy season focuses on prevention, preparation, and documentation. These steps help minimise damage and ensure a smoother, fairer claims process if disaster strikes.

Here is my key advice:

🌧️ 1. Preventative Maintenance is Your First Line of Defence
Claims for damage caused by a lack of maintenance are often denied or reduced. Your policy requires you to maintain your property.
• Clean and Check Gutters & Drains: Clear all debris, leaves, and blockages from gutters, downpipes, and external storm drains. Backed-up water is a primary cause of ceiling and structural damage.
• Inspect Your Roof: Look for loose, cracked, or missing tiles/shingles. Check the flashing around chimneys and vents. Get small repairs done before the rains expose a weakness.
• Trim Trees: Cut back any overhanging or dead branches that could fall onto your roof or property during heavy winds.
• Seal Cracks: Check for and seal any cracks in external walls, around window/door frames, and in the foundation where water can seep in.

📝 2. Prepare Your Policy and Inventory
Having your information ready saves critical time and strengthens your claim later.
• Review Your Policy:
• Know Your Cover: Understand what your policy does and does not cover (e.g., is there a distinction between "storm damage" and "flood damage"?).
• Check Sum Insured: Ensure your building and contents are insured for their full replacement value to avoid underinsurance penalties. Current building costs may have increased.
• Create a Home Inventory (Document, Document, Document):
• Take high-resolution photos and videos of every room, including close-ups of valuable items, mechanical systems, and exterior structures. This is proof of the pre-loss condition.
• Keep a list of significant assets with their purchase date, cost, and serial numbers.
• Secure Important Documents: Store hard copies of your insurance policy, lease, title deeds, and inventory list in a waterproof, fireproof container or backed up securely to the cloud.

🛡️ 3. Secure the Property and Outside Items
Minimising potential loss is your responsibility as the policyholder (Duty to Mitigate Loss).
• Secure Loose Objects: Bring outdoor furniture, potted plants, tools, and trampolines inside or tie them down securely to prevent them from becoming wind-borne projectiles that damage your property or a neighbour's.
• Prepare for Water Entry: If you live in a flood-prone area, have sandbags ready and consider elevating or moving valuable items from the ground floor or basement.
• Know Emergency Shut-Offs: Know how to turn off your main water supply and electricity, especially if flooding is a risk.

By being proactive with maintenance, having your documents readily available, and understanding your coverage, you significantly reduce the risk of damage and position yourself for the fastest, fairest resolution if you do need to file a claim.

Risk transfer through insurance, invites moral hazard, by potentially encouraging those who transfer risks to cause losses intentionally for monetary gain.

Generally, moral hazards exist when a person can gain from the occurrence of a loss.

Morale hazards do not involve dishonesty. Rather, morale hazards involve attitudes of carelessness and lack of concern. As such, morale hazards increase the chance a loss will occur or increase the size of losses that occur.

Poor housekeeping (e.g., allowing trash to accumulate in attics or basements), or careless cigarette smoking, are examples of "morale hazards" that increase the probability of fire losses.

Often, such lack of concern occurs because a third party (such as an insurer) is available to pay for losses. A person or company that knows they are insured for a particular loss exposure, may take less precaution to protect an exposure, than they would otherwise do.

Nothing dishonest lurks in not locking your car or in not taking adequate care to reduce losses, so these don’t represent "morality" breaches. Both practices (moral and morale), however, increase the probability of loss severity.

The susceptibility of buildings to loss by fire, flood, earthquake and other perils, is affected by their location.

A building located near a fire station and a good water supply, has a lower chance it will suffer a serious loss by fire, than if it is in an isolated area, with neither water nor a firefighting service.

Similarly, a company that has a backup electricity generator, has a lower likelihood of serious financial loss, in the event of a power outage.

Diverse International Risk Management specialises in loss adjusting and has an exciting opportunity for a motor assessor preferably with own car. Clean driver's licence a must. Email [email protected] cc [email protected]

If we wish to understand risk, we must first understand the terms “loss” and “perils.” Many insurance contracts) use the word “peril” quite extensively, to define inclusions and exclusions in contracts.

The environment is filled with perils such as floods, theft, death, sickness, accidents, fires, tornadoes and lightning. Although professionals have attempted to categorize perils, doing so is difficult. A common categorization used by professionals is natural perils, human perils and economic perils.

NATURAL PERILS
Natural perils are those over which people have little control, such as hurricanes, volcanoes and lightning.

HUMAN PERILS
Human perils include causes of loss that lie within individuals' control, such as su***de, terrorism and war.

ECONOMIC PERILS
Though some would include losses caused by the state of the economy, as human perils, many professionals separate these into a third category called "economic perils". Professionals also consider employee strikes, arson for profit and similar situations to be economic perils.