Please help me out here!

God helps those that help themselves

Uninsured house fire leaves family homeless

I am involved in examining a house fire where the owners had elected not to renew their home insurance and sadly the home was destroyed in a fire 6 months later. They are looking at every possible way to look at anyone who may have been in the smallest way responsible, not looking at the person themselves but simply looking as to whether they had insurance or not.

No one else will have this home insured on a property (fire) policy. The best that could be hoped for from their perspective is that a tradesmen, visitor or anyone did cause the fire and that this person either had the assets or the insurance to protect their liability. I had to explain to the uninsured owners do not have any have any right to claim direct off the liability insurance.

First they have to show that someone else was involved or may have triggered the fire, secondly they have to show that this person owed them a duty of care and that they breached this duty of care. An example of this is say the owners had a candle on a table and someone came to the door to deliver a parcel. On hearing the stranger at the door a dog rushs past and knocks the candle over. Yes the parcel delivery man’s presence contributed to the fire but I doubt any court in the land would find him legally liable for the fire damage. Finally, for the liabiltiy insurer to indemnify their insured (not the home owner in this case) they have to be satisifed that their insured is not in breach of any policy condition or warranty.

While this involves a fire, the major cause of insured losses over the past 110 years in Australia has been weather related events. Hail, storm, flood, wind, rain and flood. Who can the uninsured home owner to turn then.

What I did learn is that in the state where this fire occurred the volunteer brigade is forbidden to put any water on the burning house. All they can do is stop the fire spreading by hosing down fences, grass and neighbouring buildings. This virtually means that unless the owner or neighbours catch the fire quick enough, every fire will be a total loss as a house fire spreads so quickly it will always be a major loss by the time a permanent brigade arrives from another town. Compare having to wait for the permanent brigade to travel 25 kilometres from Maryborough to the volunteer brigade being right across the street. This is what happened here. In reality it made no difference as the home started to collapse before the neighbour finished advising the address to the operator on 000 which wanted the town and street spelt out.

I asked these really nice homeowners how much was the insurance and they told me $250. This is $4.81 per week or forgoing less than 1 cigarette a day between them. I say this as they were both smokers. I am not judging them, or anyone else, on whether they smoke or not. Rather I am highlighting just how small the sacrifice had to be for this couple to have been fully insured. Another way is to say it is the cost of forgoing one mug cappuccino a week. It would be even less if governments did not tax insurance like tobacco and or alcohol. [Victoria is by far and away the worse, followed by New South Wales where they rip off over $2.5 billion a year in insurance taxes. To learn more visit www.notaxoninsurance.com.au]

The couple made their decision not to insure only a few months after the horrific Victorian ‘Black Saturday’ bushfires and around the same time the Rudd Government gave out their $900 grants.

I have very mixed sympathies here. I do not want to see a young couple without a family home but at the same time I feel that at most times in life you reap what you sow. We all have to or should have to accept and live by the consequences of our actions. At the end of the day, as I was driving back to my hotel room after what was a long hard day, one old story summed up my feelings.

The story surrounds a deeply religious man who prayed to God each week that he win the lottery. Week after week he did not win. After many many years, God became tired of this one prayer every night and turned to his devoted servant and said: ‘help me out here, please buy a ticket’!

It is cases like this that makes me so annoyed when I see Choice Magazine and other media outlets bagging insurance which only turns people off this vital protection. On top of this you have state governments, Victoria and New South Wales, by far and away the worst, taxing the product like alcohol and cigarettes when unlike these products which place a burden on government by putting a strain on medical services and budgets, insurance protects the homeowners, communities and the economy.

I record this day as a reminder to check your own insurance and to make sure your friends and family are fully insured.

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Disclaimer: This post has been prepared as a guide and is not intended to exhaustive. While the utmost care has been taken in the preparation of the article, it should not be used or relied upon as a substitute for detailed advice or as a basis for making a business, financial or insurance decision.

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