Diverse International Risk Management

🔍 COVERED OR NOT COVERED?

A homeowner wakes up to find their kitchen ceiling has collapsed overnight.

❌ No storm
❌ No heavy rain
❌ No external damage

Just… collapse.

👉 Do you think insurance should pay for this?

Comment below: COVERED or NOT COVERED 👇

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.

Drought insurance is a type of insurance coverage that protects individuals, businesses, or organizations against financial losses caused by drought conditions. Droughts can have severe impacts on various sectors such as agriculture, water supply, and energy production, leading to crop failures, reduced yields, and economic losses.

Drought insurance policies typically provide compensation to policyholders when specific triggers or parameters are met, such as a certain level of rainfall deficit or a predetermined drought index. The specific terms and conditions of drought insurance can vary depending on the insurance provider and the region where the coverage is offered.

Here are a few key points to understand about drought insurance:

1. Coverage: Drought insurance covers losses directly attributed to drought conditions, such as crop failure, decreased crop yields, or increased costs associated with mitigating the effects of drought.

2. Triggers: Drought insurance policies are often based on specific triggers, such as rainfall levels, soil moisture levels, or other drought indices. These triggers determine when a policyholder becomes eligible for a claim.

3. Indemnity: Drought insurance typically provides indemnity payments to policyholders after a claim is approved. The amount of compensation is calculated based on the predetermined coverage limits and the extent of the drought-related losses.

4. Availability: Drought insurance may be offered by private insurance companies, government agencies, or international organizations. Its availability and affordability vary across regions, depending on the prevalence and severity of drought risks.

5. Integration with other insurance: Drought insurance can be purchased as a standalone policy or as part of a broader insurance package that covers multiple perils, including drought. For example, agricultural insurance may include coverage for drought, along with other risks like floods, pests, and diseases.

Drought insurance aims to provide financial stability and risk mitigation for individuals and businesses vulnerable to the adverse impacts of drought. By offering a safety net against drought-related losses, it can help promote sustainable agriculture, water management, and overall economic resilience in drought-prone regions.

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.

Physical hazards and intangible hazards.

Intangible hazards, may lead to physical hazards. Traditionally, authors of insurance texts categorize these conditions as "moral" or "morale" hazards, which are important concepts, but do not cover the full range of nonphysical hazards.

Even the distinction between moral and morale hazards is fuzzy. Intangible hazards are "attitudes". Nonphysical cultural conditions can affect loss probability and severity of loss.

Moral hazards are hazards that involve behavior that can be construed as "negligence", or that borders on criminality. They involve dishonesty on the part of people who take out or use insurance fraudulently (called “insureds”).

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.

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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.

Preventing Frost Damage

Frost is something we can’t control and which can do serious damage in the garden and to the landscape. The hardest (coldest) frosts occur at night. Clear nights produce harder frosts than do cloudy nights. The reason is that the ground heats up during the daytime and the heat radiates upward at night. On cloudy nights the heat bounces back off the clouds and returns some heat to the earth. On clear nights, the heat also radiates upward but with no clouds it keeps going and is lost. The heat radiates away all night and the earth gets colder and colder. Consequently the coldest period is just before dawn. When the sun comes up, it starts to warm the earth again and the cycle starts over.

Water freezes at 32°F. If the night time temperature drops to 32°F or lower, the moisture in the air or on a plant surface freezes and we call it frost. The water in the cells of plants contains minerals and plant chemicals which act like antifreeze and so plant parts will not freeze until the temperature gets below 32° F. How much below 32° F varies with the plant. If the temperature reaches the critical below 32° F for a plant, only the top may die or the entire plant may be killed. For that reason, you DO NOT trim or prune away any of the dead material to see if the plant sprouts any new growth.

To prevent low temperatures (Frost) from damaging your plants, these are a few preventive steps you can take. If the plant is in a container, pull it in next to the house under the eaves. If the frost is scheduled to be light, the plant can be sprayed with an anti-transpirant such as Cloud Cover or Wilt Stop. These will protect down to between 26° F and 32 °F.

For harder frosts, the susceptible plants must be covered to prevent injury. Ideally, the cover should act like a tent; it should completely cover the top of the plant and drape at least half way down the sides of the plant. It should not touch the plant but if it does, the worst that happens is a few tips are killed.

Tenting material can vary from a bed sheet, to a blanket, to burlap strips to specially formulated products such as N-Sulate, or Easy Gardener Plant Protecting Blanket. In each case, the tent acts like our clouds and reflects the ground heat back onto the plant. IT DOES NOT keep the cold out. Some of these materials reflect heat better than others. The best of course, are the commercial products such as N-Sulate. N-Sulate has a highly reflective interior covered with an insulating material to trap any escaping heat. N-Sulate will protect down to 22° F or 25° F Tenting material must be applied in the late afternoon and then removed each morning to take advantage of the sun warming the earth again.

Plants most in need of frost protection are the tropicals such as Citrus, Hibiscus, Bougainvillea, Aloe, Bananas, Brugamansea, Poinsettia, Canna or Ficus. A few of the hardier plants which seldom need protection are: the conifers, most cacti, deciduous trees, perennials with bulbous roots, woody stemmed plants, ornamental grasses, most native plants, and roses.

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