Those readers living in the United States take property and casualty insurance for granted. But if you move abroad, you’ll quickly discover that coverage on your property may not be available. If it is available, it may be more expensive and contain more exclusions than a U.S. policy.
For instance, friends who live part of each year in Spain told me a few years ago that they couldn’t purchase property insurance at all on their beachfront condo near Barcelona. They’ve now found a policy, but at a cost well above what they pay for comparable property in the USA.
I now live with my family in a single-family home on a Caribbean island. In preparation for a vacation, and as well as for the onset of hurricane season, I recently paid up my insurance premiums on my residence and reread my insurance policies. I noticed a clause in my homeowners insurance that reads:
"Notwithstanding anything herein contained to the contrary, it is hereby declared and agreed that if the premises described in the Schedule hereto shall be left uninhabited for seven or more consecutive days or night, this policy shall cease to apply to Jewellery, Watches, Trinkets, Personal Ornaments, Furs, Gold & Silver, and electrical fixtures/electronic items therein, but if any such property is removed to a Safe Deposit Bank, or other inhabited place …. it shall be covered while there for not more than thirty days in any one period of insurance within twelve calendar months."
Despite these exclusions, I paid a hefty premium for these policies over comparable coverage in the United States. My business partner Mark Nestmann pays only about 50% of this premium for my residence in Phoenix with similar coverage and fewer exclusions.
With this issue in mind, I contacted the claims manager of the insurance company and he invited me to his office to discuss this matter. During the discussion, he noted that there has never been a claim filed against this policy, but that as a policyholder, I should act as a prudent insured taking all necessary precautions. Apparently, the “necessary precautions” include removing most valuable items from the home upon any period of prolonged absence.
The manager also hinted that the exclusion clause could be interpreted in different ways. At the end of our discussion, we agreed that I would remove all jewelry; however the electric/electronic and the other items could remain behind, provided I set my alarm and asked somebody to come and check on the house every three days or so.
The moral of the story is when you resettle abroad, different laws and jurisprudence come into play. If your policy is written in a foreign language, pay to have a competent translator translate it into English. That way you can avoid unpleasant surprises if you ever need to make a claim.
Copyright © 2010 by The Nestmann Group, Ltd.
