money lending singapore

Property Insurance

Property Insurance

In this era uncertainty is inevitable. This led to increase in demand and importance for many products: insurance is one such product. It offers a strong shield against any unseen and uncontrolled attacks of any sort on possessions. It offers hope, trust, something to turn to in times of helplessness. This is true, including and especially, for property insurance. People dig hard throughout their lives to buy valuable possessions. What if these possessions are destroyed in a blink of an eye? What if there is no one to turn for help? This is where property insurance comes in. It covers the possessions of individual financially in case of theft, destruction, and loss of any kind. There are then specific forms of property insurance like fire, boiler, flood, etc.

Property insurance has become increasingly important especially after the 2007/08 financial crisis as this whole global level crash initiated from the housing market. People are increasingly cautious of insuring their possessions and especially real estate properties. This is because to be able to afford something requires months and years of efforts and which could be lost completely if proactive mindset is not adopted. Also, there is true psychological relief where in life where one does not unnecessarily have to worry about protecting his or her possessions as he or she knows that it will be paid off by the insurance companies. If property insurance is combined with the professional insurance it offers a strong defense against any kind of loss of ownership of personal assets.  In this globally connected world where rise and fall happens every second insurance provides powerful amour. It is making less investment and protecting big.

There are numerous shortcoming of property insurance. Although property insurance offers unmatched benefits, it also expects individuals to be practical. There is opportunity cost involved when money in form of premium is monthly paid to insurance companies. The same money if was saved in banks or invested in treasury stock or used to buy bonds would bring regular cash inflow. This is not the case in property insurance as it leads to regular cash outflow for a longer time period. Also, insurance companies many times refuse to pay for property losses occurred. This leads to big financial loss for individuals who buy property insurance.  Lastly, ones who are insured naturally develop the feelings of ignorance and negligence towards the insured goods or services. This leads to irresponsible aggregate behavior in the society. This is one aspect of the insurance that is usually not discussed and thought which has serious consequences not to any one individual, but to the society as a whole.

Mostly people have less information of insurance policies, processes, and so on. This information asymmetry leads to problems, later. Hence, ‘the more you know, the better protected you will’ applies. It is also expensive making it difficult for people to opt it. Then, people should really be careful and research well before finally selecting the insurance company. Yes, I am referring to the novel ‘The Rain Maker’ by John Grisham.

Mary Aaron




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