Purchasing an adequate insurance coverage for their property is thus of utmost important. Many new house buyers have face the problem of deciding how much is enough to cover for their property. Insuring too high, will be a waste of premium as insurance company would not pay anything higher than its actual cost. Insurance too low, will run the risk of being under insured whereby they would have to bare the proportionate cost of repairs and reinstatement of the property to it pre-damage condition.

One of the simplest ways is to follow the Property valuation report, most properties if mortgage to the bank will require a property valuation report unless the property is totally new. In every property valuation report, there are always 3 values of the property stated apart from the purchase price of the property;

1. The Market Value of the property
2. The Force Sales value of the property
3. The Insurable value of the property.

More often than not, the insurable value of the property is between the market value and the force sales value. This insurable value represents the amount of cost that the property will need to rebuild in the even of a total loss after an insured peril.

Most property owners including some mortgage officers always confuse with the purchase price and insurable value, they often take the purchase price or market value as the sum insured of the property when arranging for the insurance. While this is a common practice, the owner is paying extra premium unnecessarily.

A more accurate way is to ask this question, “If my property is totally destroy, how much money I will need to rebuild it to the same condition before the loss?” And the rebuilding cost will generally exclude the land, drainage and sewage and foundation which seldom destroy after the insured perils, unless of course the damage is caused by a catastrophic earthquake.

While reading this, my wife asked me, “Who is responsible for the damages and injuries?” And I told her my “expert” opinion. Interestingly, this morning, when she send her new toy forminor repair, she asked the car dealer’s salemen and support staff, and no one seemed to be able to answer her question. And when she told me that, it sparks an interesting issue “who is responsible?”

What happened here is, the Car is still not registered in any person or company name but using a Trade Plate which is normally use for test driving of new car for prospective customers to have a feel of the car.  Someone need to be responsible for the damage or at least the injuries suffered by the old woman.

The trade plate (red plate) is issue to car dealers only for the use of Test Driving on new car, together with the issuance of the Road Tax which is by law required by any car to be on the road, it must have an insurance attached. Whenever any prospective customers wich to test drive any car, the must use the Trade Plate which is red in color to allow the cutomer to drive the said car on the road. In this case, it is very unfortunate that the driver who was unfamiliar with the features of the car, caused an accident and injured a third party in addition to damage the car. So who is responsible? Definitely is the driver. And the next question is, “who will pay for the damages and injury to third party?” This is the question where most people are interested. Answer is The Insurance Company,  provided the driver had a valid driving license and not under any influence of alcohol or drug, it’s covered under insurance for the Trade License plate with off course , terms and conditions applied.

The damage can be repair, sever injuries and lost of life cannot be recovered, while this car is due to unfamiliarization of the new features on the new car, it is regrettable to see that many drivers on the road lack the basic courtesy and care to other road users and drive as if either the road belong to them or they thought they are immortal.

Learn to have basic courtesy on the road, why the rush, think of your love one at home and other people love one waiting for their parents, son or daughter or sibling back home waiting.

drive carefully.