Why do Insurance Premiums Differ?

The question is: “Why can another insurer just reduce my premium by R1 300 from what I am currently paying?”  In the full context it is a drop from about R5 000 tot R3 700. It is about a 25% drop. That is a lot.

Revisiting Insurance:

To understand the importance of the question, let’s quickly step back and look at what happens in insurance. Remember, insurance is a system of spreading the risk of one over the shoulders of many. Nobody should carry a heavier load than other people. Nobody should benefit at somebody else’s expense.

Underwriting the Risk:

Insurance Premiums

Fire = low probability * high cost

What the insurance company considers the risk of the item that they insurer. Insurers have all the data to know that a thatched roof house has a higher risk than a corrugated iron roof. Insurers can tell you exactly what the probability is of a White Volkswagen Golf in a specific neighborhood to be stolen on a Tuesday night. That is why some vehicles carry a higher premium and some color vehicles get charged more.

Insurers can also confirm that women drivers are a safer bet than men. That people with a license less than 2 years are more prone to accidents.

The risk matrix plots the likelihood of an event happening against the likelihood of it happening. Houses burning down is not a regular event, but when it does happen, the cost is high. Burglaries happen much more frequently than fires, but the cost is much lower than with a fire. And this risk to cost ratio is how premium rates are calculated.

Example:

I am currently paying R322 per month for my house (Building) insurance. If another company offers me a premium of R241, my immediate question would be:  “How can they offer me a 25% discount just like that?

It could be that my current insurer is really nailing me and I am carrying a heavy load for other people who claim too much. It could be, but it is not necessarily true.

It could also be that my current insurer covers things that the new insurer does not cover? As I have said regarding Pool Pumps, some insurance companies offer the cover as standard and others you have to ask and pay for it – you will have to study and compare policy wordings to be sure about that.

Insurance PremiumsIt could also be that my current insurer is more likely to pay a claim than the new company? It is the difference between finding reasons to pay as opposed to finding reasons not to pay. An example would be an insurer who refuses to pay a motor accident claim because the client parked the vehicle on the wrong side of the vibracrete fence! (The risk address on the policy was 2 Tree Street  and because the client did not have a gate yet, he parked his vehicle at  4 Tree Street (the neighbor) behind a gate. Because of that an accident that happened in another province was not paid.

Or what do you make of this repudiated claim?  The vehicle was parked in the yard and somebody collided with the car. The claim was repudiated because the vehicle’s tires were under the legal tread limit! To the best of my knowledge the Ombud decided that worn tires did not contribute to the claim and the insurer had to pay the claim. (If the same claim came from an accident in a parking lot, it would be different.)

It could be that the excesses are different.

Would you change insurers to save a R100 per month on a car if your excess changes from a flat R2 500 to R8 000?

Conclusion:

Having said all this, let me conclude with three things I have learnt:

  1. Normally the companies that I deal with and who compare well on policy wording and claims payment, have more or less the same premiums. It is in the ball park.
  2. Often, when a client was with a company for a long time with a good claims history, it is impossible to beat the premium, unless you take him/her to a company that I do not want to deal with – those that just reduce premiums to get a client.
  3. Sometimes, even with the companies I refer to in #1, I am surprised by what margin premiums differ and then, for some reason, you do get surprisingly good premiums.

To Summarize:

Before just accepting an insurance quote:

  • Compare policy wording to ensure you do not forfeit cover;
  • Compare excesses to ensure that claims are not limited because of high excesses;
  • Look for caps on covers – for instance, is there a cap to resultant damage because of a burst geyser?
  • Is it a company who try to pay claims? All valid claims will be paid; no invalid claim should ever be paid – that is a fact. At the same time, when I look at the claims that cross my desk, I can find reason not to pay many of them – like not paying for an accident in KZN, because the vehicle was parked at number 2 instead of nr 4!

The Last Story

My late father was a building contractor. An architect told him:  when the tenders come in, you throw away the lowest one. He will go bankrupt on you. Then you throw away the highest one. He wants to get rich quick at your expense. Then you will find the rest is more or less the same.

Sage advice.

What is your experience? Share it with us and please leave your short term insurance related questions in the comments or send me a mail.

 

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What About My Sectional Title Flat and Insurance?

Eric asked about his sectional title flat. Specifically he wants to know about the geyser and built-in cupboards.

Body Corporate Represents Owners

Eric correctly states that the tenant is responsible to insure his/her own assets (content). The Body Corporate has a responsibility to insure the building and common property.

There-in lies the answer. It is the responsibility of the Trustees of a Sectional Title Scheme to insure the property at a correct replacement value. It does not make sense that each owner should insure his own section separately – it will be a nightmare!

Sectional Title InsuranceSince the building is insured, it means that you have very much the same type of cover that you would have under the building section of your personal policy. Therefore geysers and cupboards and built-in stoves and ovens will be covered against “normal” perils. (Please check this statement to the policy on your scheme!)

The minimum cover would be fire. If the flat burns down, the insurance will cover the damage. But I do believe that most schemes will have policies that also cover water damage and burst pipes (burst pipes are always bad news), storm damage, and water damage. to name a few.

TRUSTEES

I love the trustee concept in general. Trusteeship comes with fiduciary responsibility – acting in the best interest of a beneficiary or the person who entrusted you. That means the Trustees must look at protecting your asset in a responsible way – including insuring it correctly.

It is important that you ask the Body Corporate or Trustees, if you prefer, about the insurance and ensure what you are covered for. If they do not know, the broker should know. But as Trustees they cannot ignore the request.

The insurance premium is part of the levies and you contribute according to your participation ratio.

Renovations

RenovatingLastly, if you have renovated your flat and upgraded it, it is important that you disclose it to the Body Corporate. If the building has standard Formica kitchen tops, but you put in Cherrywood cupboards with marble tops, you will be underinsured, which can cause problems if there is a claim.

 

Claiming:


Since the Body Corporate is the Insured, all claims will have to go through them. If a geyser bursts, the body corporate will submit the claim (as it were on behalf of the owner). If the claim is settle in cash, then it is paid to the Body Corporate will then pay the money to the owner, as applicable.

Hope it answers the question? if not, use the comments below.

If you have any short term insurance questions, please ask them in the comments below that I can try to answer it. You are more than welcome to contact me via the ContactForm.

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Swimming Pool Pumps and Insurance

How does my insurance cover swimming pool pumps?

Swimming pool pumps, gate openers, garage door openers and jacuzzi pumps are all in the same category.

Once again, please check your own policy, since the policy wording I use as a basis for this series is not the only option.

Building Section Of Household PolicyIt is important to know that these pumps and openers fall under the Building Section of the Policy. That raises the question: where is your house/building insured? Is it part of your personal lines policy with content and motor vehicles, or is it with the bank where your bond is? Read the right policy!

 

We will look at two optional extensions to give you better cover for Fixed Machinery and Appliances
Accidental damage to fixed machinery (Building Section)
Accidental Damage (Content Section)
            –  Mechanical, electrical or electronic breakdown 

Let’s look at the situation without the optional extensions.

A standard personal lines policy covers specific perils:

Insured events (Buildings)

We cover loss or damage caused by:
2.1 fire, lightning and explosion;
2.2 storm, wind, water, hail or snow.
We will not cover the following:

2.2.1 loss or damage caused by any process that uses or applies water;
2.2.2 loss or damage caused by wear and tear;
2.2.3 loss or damage caused by gradual deterioration;
2.2.4 loss or damage caused by mildew, rust or corrosion;
2.5
loss or damage caused by the contraction or expansion of soil due to its
moisture or water content, as experienced in clay and similar soil types.


2.3 earthquake;
2.4 bursting of water tanks, apparatus or pipes (including the damage to them);
2.5 impact with the
private residential structures by animals, vehicles, aircraft or aerial devices or other
objects falling from them, or falling trees except when felled by someone;
2.6 collapse or breakage of aerial systems and satellite dishes;
2.7
theft or attempted theft;
2.8
burglary;
2.9 leakage of oil from oil heaters;
2.10 malicious damage, but
we do not cover malicious damage while your private residence is lent, let or sublet to a tenant;
2.11 subsidence or landslip. However,
we do not cover loss or damage:

2.11.1 to drains, water courses, boundary walls, garden walls, screen and retaining
walls, gate posts, gates and fences, driveways, paving, swimming pool borders
or tennis courts;

2.11.2 caused by the contraction or expansion of soil due to its moisture or water
content, as experienced in clay and similar soil types;
2.11.3 caused or made worse by faulty design, insufficient compacting of filling, poor
construction, or the removal or weakening of support to any building;
2.11.4 caused by structural alterations, additions or repairs;
2.11.5 caused by surface or subterranean excavations other than those performed in
the course of mining operations;
2.11.6 caused by normal settlement, shrinkage or expansion of the building.
If
we require it, you must prove that the loss or damage being claimed for was caused by subsidence or landslip.

 

But what happens if your garage door opener just stops working?

There is an option to extend the policy to add cover for these items. One insurer that I frequently use, offers this as standard. This option goes as follows:

Accidental damage to fixed machinery

We will compensate you for sudden and unexpected damage to fixed machinery installed at your risk address. The fixed machinery must be for domestic use only.
We will not cover:
1.1 depreciation;
1.2 gradual causes (such as wear and tear, rust, mildew, corrosion, decay);
1.3 loss or damage:
1.3.1 to windmills;
1.3.2 caused by household pests (such as rodents, ants and moths);
1.3.3 caused by cleaning, repairing or restoring by any manner or method;
1.3.4 to any data or telecommunication equipment or apparatus;
1.3.5 if covered by a manufacturer’s guarantee, purchase agreement or service contract.
Our compensation is limited to the amount shown in the Schedule.

INCLUSIVE vs EXCLUSIVE 

Here is a very important fact that we need to understand. The standard building insurance is an INCLUSIVE policy. If the risk is not INCLUDED in the wording, it is not covered. Also called a “Perils Based Policy.”

This extension is an ALL RISK policy. It is EXCLUSIVE. In other words, if what ever happens to your swimming pool pump is not part of the WE WILL NOT COVER section, it has to be paid.

Example:

Somewhere during the winter my swimming pool pump stopped working. I am not sure why, but I have this extension on my policy. That means I can put in a claim. That claim must be supported by a damage report. The technician must provide a reason why, in his opinion, the pump stopped working. Rust, ants or the digs chewing will not be covered.

If the damage is not because of deterioration, ants, dogs or me tampering, the insurance must pay. There are only two “problems” with type of cover. First, I can never confirm a claim when a client asks me and, two, since you need damage reports, it can take a bit longer to settle the claim. Other than these  two small “problems,” it is excellent cover.

You can have similar extensions (for fridges, stoves, etc) under your content section, then it is called:

Accidental damage (CONTENT)

We will compensate you for accidental physical loss of, or damage to, your insured property while it is in your private residence or on your premises, up to the amount shown in the Schedule.
Cover for accidental damage excludes:
3.1 depreciation;
3.2 gradual causes such as wear and tear, rust, mildew, corrosion, decay;
3.3 loss or damage:
3.3.1 payable in terms of Basic cover;
3.3.2 caused by household pests (such as rodents, ants and moths);
3.3.3 caused because of cleaning, repairing or restoring by any manner or method;
3.3.4 of or to any tools, gardening implements, garden furniture;
3.3.5 of or to automatic swimming pool cleaning equipment;
3.3.6 of or to any portable computer equipment or cellular devices;
3.3.7 of or to any contents of refrigerators or freezers;
3.3.8 covered by any manufacturer’s guarantee, purchase agreement or service contract.
3.4 cracking or scratching of glass, glassware or any similar breakable article. This exclusion does not apply to jewellery, cameras, televisions or computer screens;
3.5 chipping or denting of furniture or domestic appliances;
3.6 the cost of reproduction or repair of data of any kind;

Electrical Mechanical Breakdown

“White Goods Insurance

3.7 mechanical, electrical or electronic breakdown (unless specifically shown as included in the Schedule under “accidental damage”).

Some people call it “white goods insurance” as fridges and stoves were traditionally white and this cover is aimed at appliances.

 

I trust that this helps you understand your policy better. As I have said, some insurers have this as a standard cover, with others you have to ask for it. It is best to confirm with your broker or insurer that you have this cover, if you want or need it.

TIP:
Consider items in your house that might be damaged and the cost to repair. I recently had a claim of over R10 000 for a heat pump (electricity saving geyser.) Fortunately we disclosed the fact that the heat pump is part of the building and we need cover. We also increased the limit of Fixed Machinery to R15 000. The claim was paid

.

Any questions regarding short term insurance? Post them below or email me. Do me a favour, I love answering.

 

 

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Is My Paving and Perimeter Walls Covered?

Somebody asked me: “what is included under the building section of my Personal Lines Insurance Policy. Is my perimeter fence and paving covered?”

Please remember that this is a generic answer – it is important to study your own policy to be sure that you are covered for what you need. There is a reason why we have different insurance companies and different premiums. Ask your broker or contact your insurer.

The short answer is:

“Yes, it is covered, but only for the perils mentioned in your schedule and policy wording.”

I suggest you read the long answer (and your own policy).

The Long Answer

So this is what the wording I use as a basis says:

Property insured
white concrete buildingYour property insured is the private residential structures of your home. The Schedule gives its risk address and wall and roof construction. It includes all fixtures and fittings that belong to you as the owner or that you are responsible for as the owner. It does not include any fixtures and fittings that belong to a tenant or for which a tenant is responsible.

Then in the definitions, it says this:

fixtures and fittings belonging to the owner of the private residential structures while
in or on the structures;
fixed recreational and ornamental structures;
paved and surfaced areas (including driveways) of brick, concrete, asphalt or stone (not gravel);
boundary and other walls, gate posts, gates (including all the machinery related to the gates), fences (other than hedges);
tennis courts;
swimming pools, spa baths, saunas and associated machinery and equipment, but
not including movable swimming pools;
satellite dishes;
lightning conductors/masts;
fixed electric generators;
borehole machinery supplying water solely for domestic purposes;
septic tanks

From the above it is clear that paving and border fences and walls are included.

Two Things To Remember

There are two things to remember:

When you decide on the replacement value of your building, it is important to provide for paving and perimeter walls, or you could end up under insured.

The second thing that you need to make sure of in YOUR policy, is what you are insured for. Generally your insurance will cover you against about 11 perils. The question is: did one of the defined perils cause the damage? If the answer is “no,” there will be no cover. That is why you must make sure of what you have.

Retaining walls are bad news, from an insurance perspective. Make sure what your situation is before there is a problem!

Examples:

  1.  The neighbour reverses out of his yard and into your palisade fence. Will the damage be covered?  Since this policy covers
    impact with the private residential structures by animals, vehicles, aircraft or aerial devices or other objects falling from them, or falling trees except when felled by someone;
    It will be paid. (Your insurance will then claim from your neighbour or his insurance.)
  2. You see a guy along the road with a chain saw advertising that he trims trees. You hire him to cut a few branches from your tree overhanging your house. In the process one of the heavy branches falls on the roof of your house and causes damage. Will the claim be paid? No, because it is felled by someone.
  3. It is good to remember that insurance covers things that happens “suddenly and unforeseen.” Any gradual wear and tear or process is not covered.

CONFIRM

QuestionsOne of the basics rules of insurance is:  disclose. Be honest with your insurer and rather tell him more than less. At the same time, if you have a question like:  “Is my paving covered?” contact your broker or insurer. Perhaps it is not covered, but it can be. Perhaps it cannot be covered, for some reason, but then it is important that you know that.

If you have short term insurance related questions, you are welcome to contact me. Or leave a comment below.

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Lockdown Day 161 – 3 September 2020 – Mind Travels

“The sand in the hourglass runs from one compartment to the other, marking the passage of moments with something constant and tangible.
If you watch the flowing sand, you might see time itself riding the granules.
Contrary to popular opinion, time is not an old white-haired man, but a laughing child.
And time sings.”
― Vera Nazarian, The Perpetual Calendar of Inspiration – Goodreads

Lockdown Blues

Day 161 of Lockdown. In the last week or so, I became aware that lockdown is bearing down on me. Even a big introvert like myself is starting to feel the lack of real social contact. The eternal mask and hand sanitizer is becoming more than just a bit of a bore. Keeping up the vigilance against an invisible enemy is working on the stress levels.

Fortunately I am going to do a policy renewal with a client, that will bring some personal contact.

Mind Travel

And I can always go for a mind travel. I cannot explain why Bulungula is filling my memories this morning. It was a very special holiday and we did enjoy it a great deal. But then, we also had other special holidays. In fact, every holiday is special.

Canoodling at Bulungula

Canoodling at Bulungula

Was it that we felt young when we canoodled on the river with the change of tide? Canoodle is a fabricated word. Bulungula Lodge has these pool noodles that we used to float on the river. We were like kids. Racing each other up river, taking advantage of short cuts, getting bogged down in wet, muddy sand. Racing back down river on the tide, trying everything possible for some advantage to win the race. We were like kids again. That is what grandchildren does to an old man – makes him young again.

 

Showers, Baths

Memories of Bulungula are about rocket showers and a rocket bath. That rocket bath is something special. There is a piece of pristine forest, encamped to protect it against the goats. That is where the “luxury tents” are. This morning I wish I could have my morning coffee on the stoep of our tent,  just enjoying the bird sounds and looking out over the sea.

Enjoying a Bulungula Rocket Bath

Enjoying a Bulungula Rocket Bath

beaches with cows Buungula

Beaches with cows Buungula

Coffee on the Stoep Bulungula

Coffee on the Stoep Bulungula

On the top of the dune, there is the rocket bath. The water is heated by a fire under the bath. Bum protection is a plank board that you sit on. When the water gets too warm, you add more cold water. If it gets too cold, you add more twigs. And so you sit in the drizzle, snug in the bath, overlooking the beach. That is how life should be.

Cultural Experience

Bulungula from where we walked kilometers in many directions. Where a diverse cultural experience was enriching. We shared the lounge with people from England, Germany, Australia, Texas. How on earth do they come from all over the world to a place on the Wild Coast that most South Africans don’t even know of?

Ilanga Fire Restaurant

What about pancakes and orange juice at Ilanga Fire Restaurant. Here I must share background. In Gonubie is the Pancake House. Exquisite pancakes we had there. Although we might have been lucky, on that day.

Ilanga Fire Restaurant

Ilanga Fire Restaurant

Fellow Beach Lovers

Fellow Beach Lovers

Beaches to die for Bulungula

Beaches to die for

Bulungula is a tourist hub. There are other businesses that benefit from the tourists, as it should be. With the memory of Gonubie’s pancakes, we decided to support Ilanga Fire Restaurant. The pancakes were good, The orange juice turned out to be Oros. And somehow, the simplicity of the setting and the conversation with the local guide is what sticks in my memory.

Community

When you stay at Bulungula, you become part of a community. It is a community project. It was a new experience to stay at a Backpackers establishment. But it was a good experience. Over lunch and dinner you spoke to people from other parts of the world and got to see your own world through new eyes. It was good to see how a community cares for an autistic boy with love and acceptance.

But this morning, it is the open beaches of the Wild Coast that calls my name. The endless kilometers one can hike without seeing another human being. Leaving footprints as if you are the only people on earth. This morning it is the peace and calm of the Wild Coast that I crave.

Life, Memories & Community

In a previous post (Day 158) I said that life is made up of a series seemingly insignificant events that add up to a life. The thing is, these seemingly insignificant events are not just events, they make us what we are. They leave imprints. The leave memories. And that is how we can relive and re-interpret the past. Albeit, sometimes, with nostalgia. I am a richer man for the Bulungula experience. I will have a better day for dusting the memories.

I conclude my musings with the somewhat sad, somber song from CATS, by Andrew Lloyd-Webber – Memories. You can listen to it here. It is a somewhat sad, somber song with a happy ending, because as the last echoes of Grizabella’s song dies away, she is accepted back into the “family,” so to speak. Indeed a new day was breaking and new memories were in the making. Seemingly insignificant events made significant by and through others. Memories!

Midnight
Not a sound from the pavement
Has the moon lost her memory?
She is smiling alone
In the lamplight
The withered leaves collect at my feet
And the wind begins to moan
Memory
All alone in the moonlight
I can smile at the old days
I was beautiful then
I remember
The time I knew what happiness was
Let the memory live again
Every street lamp
Seems to beat a fatalistic warning
Someone mutters at the street lamp gutters
And soon it will be morning

Daylight
I must wait for the sunrise
I must think of a new life
And I mustn’t give in
When the dawn comes
Tonight will be a memory too
And a new day will begin
Burnt out ends of smoky days
The stale cold smell of morning
A street lamp dies, another night is over
Another day is dawning

Touch me
It’s so easy to leave me
All alone with my memory
Of my days in the sun
If you touch me
You’ll understand what happiness is
Look a new day has begun

 

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Lockdown Day 158 – 1 Sept 2020 – Focus

Life is made up of small, seemingly insignificant, events that ends up in a life.

The MBO Seminar

One such event was a seminar I attended way back in 1989. A management-leadership training seminar. Those days it was all about Management by Objectives. Then somebody did another PhD and MBO was replaced by something else. And the process keeps repeating.

My Memories

I remember two things about that 3 day seminar:
1. One lunchtime we were playing cricket. With the last ball of the session one of the players were bowled middle stump. As we were going in, he was rather white in the face. Somebody asked him: “What are you going to tell Elaine (the presenter) if she asks you why you look like this?” He answered, in a funny sort of voice, “I will say if the ball hit her where it hit me, it would have been a miss.”
2. The second thing I remember, is that we spend a lot of time on the idea of focus.

Focus

Life out of fucus

That seminar had a direct influence on me enrolling for an MBA the next year.

As many of you will know, I love photography – writing with light. Photography is about focus. Crisp, razor sharp focus. And today I am somehow, thinking about focus.

What you focus on, is what you get. That is especially true with macro-photography. You focus on the eye of the bee and the wings are blurred. Which is absolutely fine if you wanted to photograph the eye in the first instance.

Focus

Sometimes I am out with another photographer and we would take photos of the same scene. We will compare our photos. It is always amazing how the same scene can differ because of two different focal points. You suddenly have two printable photos of the same scene seen through different lenses.

Here is the thing: even if we tried, we cannot take the same picture!

Life is the same! We see the same event through different lenses. We focus on different aspects of the same event. We see different things in the same event. That could be anything, from farm murders, BLM, Covid-19, Lockdown, a joke, a brand of car, food or service, anything and everything.

The challenge is to at least try and see where the other person focused when he took the photograph.

Using depth of field to hide a chaotic background

Focus can hide a lot of things. In photography it is called “depth of field.” It refers to the effect of getting the fore- and background in or out of focus. Sometimes you want to show a scene from here to the horizon – many things must be in focus.
Other times you just want the object of the photo to be in focus. It might be that you see this lovely flower, but the background is a mess, or there is something in the background that will distract the viewer from the photo and you want them to see the photo.

 

You can even see my earthworm farm! Nothing hidden here.

Once you understand the technique, it is good to experiment.

In life there are many examples where people use this same depth of field focus technique, depending of where they come from or where they want you to go. I am not sure why, but it happens.

If it is beneficial, people would like to use a laser, pinpoint focus, cutting out all the noise, background and context. It connects with what I said about statistics in a previous post. It is up to us to enquire about context.

Context

Years ago there was a game on TV, I think. Contestants had to guess where people were (context) based on facial expressions. This particular evening there was a very stern face. Contestants had all sorts of ideas. Nobody got it right. When the photo was fully zoomed out, the man was walking from a church. You see, in everything, context matters.

Context could be deliberately disguised for some reason  or the context can be in our own minds. Because I am scared, everything becomes a threat, if you understand what I am trying to say. We must be aware of it. Our own context can ruin many things.

Puzzles

I like the big picture (despite I love taking close-up photos). I want to see the big picture before I study the detail. It is like looking at the picture of a puzzle before putting the piece in the right place. It just does not make sense to ignore the big picture and try to build a puzzle by trying to fit the pieces – like building upside down!

But the big picture can also hide a lot of things. We cannot just look at the big picture, because too often decisions are made on the detail.

That is the nice thing about a camera – you can come closer and farther away. Focus closer or farther away. You can zoom in or out.

Beware of Wrong Focus

One morning on the radio somebody spoke about a fundraiser for some disease. About 250 000 people worldwide suffered from this particular disease. Percentage wise it is nothing. I mentioned this to a hiker friend who works in the medical research field and said I don’t understand this. I would rather spend time and money on research where 250 million people were involved. She changed the focus. It is not just about how many people suffer from the disease. The question is also about pain, discomfort, and other effects of the disease. Now, yes, if 250 000 infants live in pain because of this disease, it makes sense. (It makes sense, anyway, fortunately, for some people. My focus is inconsequential.)

Where you Focus

Where you focus is what you see – young girl or old woman?

With focus, we show people where we want them to look, we show them what we want them to see. But it is not just the photographer that uses focus – our own minds, our own backgrounds, interests, experiences, training and prejudices are a lens. We see everything through our own lens.

This photo on the left also comes from that MBO seminar. Where you focus is what you see – a young girl or an old woman. And once you see it, you always see it!

 

In life, and this I realize more and more, you have to focus to succeed. In the modern world more than ever.

What do you think? What is your experience? Please leave your comments below.

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There is a Tide in the Affairs of Men

“There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.”

Julius Caesar Act 4, scene 3

And Helen Keller Rice said:

“Life is either a daring adventure, or nothing at all.”

DO OR DIE

This post has a bit of a background.

DEVILS PEAK

  1.  The evening before my knee replacement, on 10 Feb 2020, my wife and I had pizza at Blouberg. I was more than a bit despondent. Because of an Achilles injury, I could not hike for more than a year. I visited the Biokineticist weekly for 6 months and I really get well and fit. I look forward to an active December holiday in Transkei and Hogsback. I dream of all the hikes and cycling. On 10 December, when I get out at Dwesa, my knee is too sore to walk. All my dreams of walking km’s gone. Including the dream to visit Disas on Table Mountain in Feb 2020.Devils Peak

    As I look at Table Mountain on the eve of my operation, thinking of all my good times on that spectacular piece of sandstone, I decide that my first real hike with the new knee will be Devils Peak. Not too long, not too difficult, but still a serious hike.  During Lockdown, walking as much as possible, I decided that 6 months is a mile stone in the healing process. 5 September is the first Saturday of Spring, just short of 7 months.

    Either, I am a Devils Peak Hero (and I kept a Devils Peak Hero in the fridge for a long time to celebrate at beacon top), or I will fail trying.

    A REAL HERO

  2. The second background story I read this morning on Linkedin.Salute In 2006 he started working as delivery man at R300 per week. What he saw in the houses where he made deliveries became an inspiration.  That inspired him to enroll for Matric in 2007. Not an easy feat for somebody who left school after Standard 6 due to circumstances. In 2007 his name was in the newspaper – he has a Matric Certificate. 2008 he got a job as gardener. Later a better job where Matric was a requirement. On 18 Aug 2020 he received his certificates – a National Diploma in Law and an LLB from UNISA.

My own dream of Devils Peak fades to nothing against this accomplishment.

THE PRICE OF DREAMS

That is what made me think of the Shakespeare quote above.

We have to accept the challenges. We have to challenge ourselves. Everything we dream of, lies beyond or comfort zone. Everything we want, requires us to take another step higher. That is where fortune lies, says Shakespeare.

And if we stay at the bottom, looking up at Devils Peak, dreaming about Disas, but never venturing out? If we stay in the position as a delivery man, just envying the people who receive the deliveries?

Omitted, all the voyage of their life
Is bound in shallows and in miseries.

The best part is – it lies with us. I must take the chance that I may not get to beacon top on Devils Peak. But, unless I take the risk, I will never know.

Unless we take the first step, unless we keep on putting a foot on the next step, we will never know.

Price vs Reward

Following our dreams has a price tag. But achieving our dreams has a reward. As long as the reward outweighs the price, it is fine!

Not following our dreams, also has a price. Perhaps the most costly price of all! Is there a reward, though?

I’d rather die trying, than die with the wish.

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Take Cover – Would You Pay This Claim? #2

If I were to believe the good people of the movie “My Fair Lady,” “The Rain in Spain falls mainly on the plains.” It is raining in Cape Town now, and I promise you, it falls everywhere.

Rain and leavesYou probably wonder how rain, Spain and insurance all get together? Well, you see, the rain that falls on the roof of my house runs into the gutters. If the gutters cannot handle the run-off, the water may go where it should not and cause damage. And that could lead to an insurance claim. And that claim may be paid – or not.

And that is the topic of this post.

IF YOU WERE THE INSURER – WOULD YOU PAY THIS CLAIM?

Image by sandid from Pixabay.com

We are busy with a series of posts to help us understand our short term insurance better. If we understand our insurance, we can make more informed decisions as to what to cover and what not. Or how to cover it. Or perhaps decide we will rather not cover some items.

 

 

Once again I urge you to study your own policy wording or speak to your broker. Please do not take this post as advice, because I am working on a “generic” policy wording. Furthermore, your circumstances and needs are unique.

Water Damage is An Insured Peril

Normally, a personal policy that covers your house and/or content will cover you for water damage. That means, if you have Building Cover (i.e. the structure of your house) and the water overflows the gutters and their is damage to soffits or ceilings, the insurance would pay.

If that overflow causes damage to the content of your house (and the content is covered according to the schedule), this damage will also be covered.

The reason I am thinking of this, is that recently, while out walking for my lockdown exercise, I noticed a house with an “elevated garden.” The gutters were overgrown – you have probably seen houses like that. I have a lot of trees on the yard and have to clean the gutters regularly. It always amazes me how quickly leaves accumulate in the gutters.

Would You Still Pay The CLAIM IF …

Let’s suppose with the rain today the water damage described above happens at this house with the “elevated garden.” Will the insurance still pay? What is your feeling? The gutters are blocked. The water has to overflow and go where it should not go?

DUTY OF CARE
You must take all reasonable precautions and all reasonable care to prevent or minimise loss, damage, death, injury or liability.

If you read your policy wording, you will probably find a requirement like the one above somewhere in there.

Looking at this requirement, the questions is, did the owner of the house under discussion take reasonable care?

will the assessor pay

ruta-celma unsplash.com

Based on this clause, am doubtful whether an assessor will approve the claim!

Insurance covers you against sudden, unforeseen events. Any deterioration over time is also excluded. There is an onus on us to maintain our possessions. Unfortunately, the normal short term insurance contract is not a maintenance contract.

 

The principle of care is very important.

  • Leaving a bicycle unlocked while you have breakfast after a ride – can you claim that you have exercised reasonable care if it is stolen?
  • Leaving your car unattended with the keys in the ignition – did you take care? (I once left my car in Knysna in a parking lot with the keys in the boot! Middle of December holiday. When I got back the car guard stood at my car – he got a good “Christmas” that day!)
  • Leaving your front door unlocked and the house unoccupied – in a case like this it is not even burglary!

The principle today is – to get claims paid without hassle, take care of your possessions.

I love this saying:

“Insure what you have. Live as if you have no insurance at all.”

What are your thoughts? Please comment below. You are also welcome to post your Short Term Insurance related questions below.

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Lockdown Day 152 – 26 Aug 2020 – Question

I like the Moody Blues. They still make good Music.

I recently thought about questions, and that made me think of the Moody Blues song, Question. The YouTube link below.

“Question”

Why do we never get an answer
When we’re knocking at the door
With a thousand million questions
About hate and death and war?

’cause when we stop and look around us
There is nothing that we need.
In a world of persecution that is burning in its greed.

Why do we never get an answer
When we’re knocking at the door?
Because the truth is hard to swallow
That’s what the war of love is for.

It’s not the way that you say it
When you do those things to me.
It’s more the way that you mean it
When you tell me what will be.

And when you stop and think about it
You won’t believe it’s true.
That all the love you’ve been giving
Has all been meant for you.

I’m looking for someone to change my life.
I’m looking for a miracle in my life.
And if you could see what it’s done to me
To lose the love I knew
Could safely lead me through.

Between the silence of the mountains
And the crashing of the sea
There lies a land I once lived in
And she’s waiting there for me.

But in the grey of the morning
My mind becomes confused
Between the dead and the sleeping
And the road that I must choose.

I’m looking for someone to change my life.
I’m looking for a miracle in my life.
And if you could see what it’s done to me
To lose the love I knew
Could safely lead me to
The land that I once knew.
To learn as we grow old
The secrets of our souls.

It’s not the way that you say it
When you do those things to me.
It’s more the way you really mean it
When you tell me what will be.

Why do we never get an answer
When we’re knocking at the door
With a thousand million questions
About hate and death and war?

When we stop and look around us
There is nothing that we need.
In a world of persecution that is burning in its greed.

It started with my frustration with somebody repeating the same, unproductive, question over and over.

Basically there are four questions. How, What, When and Why.

As a youngster there was a series of books – The How, What and When Series. I still have some of them. “How Levers Work” is on my shelve and the knowledge in my head! When was about history, those I did not buy. How things work, What Things do and How they do it, that still fascinates me. Later in life, I discovered that it is important to know history. Not to fight with it, because that is a waste of time. Even if you could burn Rhodes a million times, it will not change history. But study what Rhodes did and how he did it and perhaps you will find parallels in the modern world? Perhaps you will think twice before accepting too many Chinese gifts, or am I seeing things? When I was 12 years old, When did not interest me. Now I know better.

Anyway, my thoughts were about questions. We had a laptop problem. How the problem developed is important – up to a point. “Why do we not have a key?” I do not know. It does not matter how many times you ask me “Why don’t you have a key?” the answer will always be the same. Yes, it is stupid. Yes, it is negligent. Yes, it is everything. But it is history. But we have wasted so much time going round and round and round. And the most important question is: “Can you fix it?”

It made me think of these questions – how, why, what, when. Can I just ignore any of these questions? The answer is a definite and resounding “NO!” But they must be used correctly and perhaps in the right sequence?

We need to think how we use these questions. Sometimes “How” refers to the past, sometimes to the future and sometimes to the present.

Listen to this: “What did you do? How did you do it? When did you do it? Why did you do it?” Will the answer be the same if I ask “When did you do it? How did you do it? Why did you do it? What did you do?” I doubt I will get the same answer.

How did it happen? refers to the past. It is important, because the development of the problem may suggest a solution. But dwelling in the past is very unproductive. “How are we going to fix it” – that is present and future.

It seems all these interrogatives can be used looking back or looking forward. “Why did you do it?” as opposed to “Why are you doing it like this?” Both are important to know. Both can lead to very productive discussions. But we cannot change history!

When (there it is again!) I was about 11 years old, I had an accident with my dad’s brand new bakkie. Despite the fact that I was very careful. The question is “how did it happen?” To this day I am very aware that if a vehicle drops into a hole it will move sideways and i have no control over that movement. Productive how. But dwelling on that event is unproductive. Today the question is “How do you prevent something similar?”

And the point is, we need to think about our questions. Why (there it is!) is it important to have the information that I am asking for? How will the information serve the purpose? What will I do with the information? When will I use the information? Or I am I just asking out of curiosity and because I am a gossip?

Edward de Bono wrote a book called Practical Thinking. He opened my mind to accept something that used to irritate (the hell out of) me. I could never handle it when somebody “stated the obvious.” Then De Bono investigates the levels of answers to a problem, opening with stating the obvious! His conclusion is that even stating the obvious, somebody gives some information. By saying “It fell,” the person is saying it did not drop, it was not thrown, it was not …


Unfortunately De Bono did not offer any help for my frustration when I have to repeat myself ad infinitum. De Bono does not offer any helpful suggestion when people start asking irrelevant questions. “I saw an accident today.”  “Was it a blue car or a red car?” The problem is, sometimes these irrelevant questions turn out to be very relevant!

I just cannot win! “I need a miracle in my life!”

(Oh, I forgot about where! Just imagine “where were you when the laptop did the update? Perhaps.)

 

 

 

 

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Take Cover – Understanding Short Term Insurance (#1)

In this series I will try to unpack short term insurance for you.

Knowledge is Power

A knowledgeable client is a good client. Understanding insurance makes it easier to make decisions on what your insurance should look like. Client and broker are partners identifying risks and finding the best solution to mitigate the risk. This leads to a good claims experience.

This first video, I will look at the history of insurance and how it all started.

THIS IS NOT ADVICE. Please consult a financial advisor before making changes to any financial portfolio. I trust the knowledge you will gain here, will beneficial in the process of discussing your insurance need.

Insurance

Insurance is a system of spreading the risk of one onto the shoulders of many

A shared burden is a lighter burden

 Camel Traders of Babylon

Insurance goes back a very long time. Even the Camel Traders of Babylon had some form of insurance.  (Link in description) called Bottomry. It dates to 4000BCE. The merchandise was financed. In the event the merchandise was lost, the loan was cancelled. The interest was considered an insurance premium.

The Sailors Discovering Trade Routes

When sailors like Columbus, Diaz, and others started circumnavigating the earth in the 15th century, the financial risk became very high. The ships were expensive and one needed capital to build it. The cargo was equally valuable. Imagine a shipwreck at the Cape of Storms and ship and cargo is lost. A huge financial setback for everybody.

The first form of insurance was to spread the cargo over many ships. That way, if one ship were lost, the owners would not lose their whole investment in the cargo as well. That was the first instance of shared burden.

Lloyds

There was a coffee shop in London, Lloyds, where all the merchants would meet. It became a clearing house for information. Who is sailing where; who has cargo to ship or who has capacity to ship some more cargo.

In time people saw an opportunity to insure a ship and cargo at a premium.  This was a better option than the spread cargo option.

And that, in a nutshell, is how our modern insurance started. Some ships will be lost, the insurer would pay the agreed amount, but the premiums were more than the claims.  That means there was a profit and reserves accumulated.

The principle is still the same – risk shared over many shoulders.

In modern times, the risk is spread between clients, insure and re-insurance companies to ensure the system can carry the load. Furthermore, it makes sense to also spread the risk over a wide geographical region and diverse industries.

To understand this, imagine all the clients live in a hurricane prone area. Then the risk is not spread well and too many simultaneous claims can hurt the system or premiums would be too high. It is the nature of insurance that if one hurts, everybody hurts. The worst conceivable thing is an insurance company going bankrupt!

Summary

For insurance to work, every stakeholder must play his or her role:

The insured premium payer must pay his premium and not try to get an advantage over other insureds

The insurer must underwrite the risk properly to ensure that they operate profitably

Re-insurers must underwrite their risk properly to ensure the integrity of the whole system

Risk must be spread over a variety of clients over a big geographical area to protect against natural disasters, such as hurricanes. It makes sense to spread the risk over diverse industries. Actuarial science ensures that one industry or region do not subsidize another.

And that is the history and principles of the wonderful product called insurance.

Please leave comments below. You are welcome to post short term related questions as well.

Further Reading
Britannica

IedU

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