People often wonder if purchasing insurance is worth the money, or if there has to be a major storm before a policy will pay out? It is all a matter of perspective. Insurance is there to protect you financially at a time when you need it the most. A home insurance policy will cover you against the major perils of hurricane and fire, but people often forget that claims from burst pipes in their walls can create a significant loss in a non-storm year.

Theft cover is also included for contents cover, and this is another important peril to be insured against in today’s modern society. There are also many add on covers such as All Risks for valuables that you remove from your home such as your jewellery and electronics which can certainly be important when your iPhone is dropped and cracked! There are also other forms of cover such as sports equipment, freezer contents, workers’ compensation for domestic workers, etc.

Having coverage against hurricane-related damage is still the reason that most people here in Bermuda purchase Home Insurance. However, if you remember earlier this year there were a few home fires, and I am sure that those homeowners are happy that they had Home Insurance to cover them against the damage.

Often a question arises about how much insurance should be bought? This will vary from home to home, person to person. For example: home buildings cover should represent the rebuilding cost of your home at today’s prices — not the selling price of your home. Your insurance company will be able to assist you with this. Here at Colonial we have done a good job over the years ensuring that our policyholders are not underinsured by measuring each home and advising our clients individually. This was noticeable after Hurricanes Fay and Gonzalo in 2014 when only about 5 per cent of policyholders were underinsured, which was an improvement over Hurricane Fabian in 2003. If you have a high-end home, with expensive fixtures, fittings and extras, you should be expecting to insure for a higher amount per square foot than someone without these features to negate the impact of any potential underinsurance.

Your insurance value on your home here in Bermuda should usually go up each year due to inflation — that can be inflation due to the cost of the actual building materials, inflation in social insurance, inflation in labour rates etc; in other words inflation in the overall costs of building that home wherever they may come from.

Colonial assists our Policyholders with this each year by index linking our clients’ sums insured. In general, if your sum insured stays the same year after year, you run the risk of being underinsured and you will be penalised in the event of a claim — which is not what you want to hear when you are down on your luck facing a horrible claim situation. So just ask your insurance professional to assist you with your Building Sum Insured.

For contents insurance, the Sum Insured, or the amount of Insurance should represent what your items would cost to replace at today’s prices. If you have antiques, valuables such as silverware, collectibles, artwork, jewellery or anything that you might need an appraisal for, it makes sense to tell your insurance company about it when you purchase it (or receive it as a gift) as quite often these items are best insured using the appraised value, and your insurer will hold a copy of the appraisal on file to be used as proof of ownership and value in the event of a claim. Without this proof, it will be almost impossible to prove your claim and obtain the value that you expect in the event of a claim.

So, does it make sense to insure your home or contents? Only you can answer that, but every client that I have ever had sit in front of me after a claim has always been pleased that they have had insurance in place.

For some it is the knowledge that the have the financial wherewithal to make the necessary repairs. For others it has been knowing that they have someone to turn to for advice. For more than a few, we have also been a shoulder to lean on.

Hopefully all of these reasons are good ones to purchase insurance, and in today’s high stress, highly mobile society, it is often good to know that you have a partner in your insurance company. So in my opinion, insurance is a sensible purchase whether it is to protect against a hurricane, a fire, or a theft or many of the other problems that life often throws at us all.

Jennifer Murdoch is general manager of Colonial Insurance.