Another reminder in the business section on stuff today, if you are renting you are responsible for any damage. and it can be substantial if it all goes wrong.

If you're renting you need to have some level of contents cover. Ideally enough to cover the replacement of your possessions but more importantly cover for damage you may be liable for.

The health system is a bit like public transport. Something you take if you have to, but something you'd rather avoid. And just like the bus, it can be a pain to catch, sometimes it's right on time, most of the time it's full or you just plain old miss it.

Today's health system is markedly different from what it was even 5 years ago. It's starting to look like it's being rationed rather than provided as a free public service.

These articles highlight the plight of those subject to waiting for the public health system:

It oft be said, ’All my insurance adviser does is turn up and sell me more insurance’. While this may be true, I hope it's for the right reasons, you have more risk. This is the point, your risks change.

What is surprising is how people set and forget their insurance, be it life or property insurance. A great example is a past colleague who had not reviewed his contents cover since university, $40,000 then might have been a great deal, now a successful business owner with teenage kids it barely covers what's in his lounge.

Taking a lead from a colleague on blog questions, I've talked extensively on what is income protection, how it works and how to apply it to your situation. What I haven't explained is what it is likely to cost you.

Taking into account that everyone has a different situation, occupations, levels of income, medical history and available financial resources I am going to football the averages for you.

Today in New Zealand the average gross taxable income for earners is about $55,000. I'm going to use this as my base income to establish the cover level using a net of tax, agreed value approach.

Also called premium waiver or premium cover. In a nutshell, it is insurance for your insurance premiums. Ok stop there! Before you go 'huh? I don't need that', consider the following.

The point of waiver of premium benefits is to pay your policy premiums when you are disabled and unable to work. Extending this logic, if you are disabled and unable to work, your income has likely stopped or reduced, often significantly.

If you have a reduction in income due to a disability, it is likely you may miss a premium payment or two. Miss three (months) and your insurance cover will lapse.

If you are pregnant or looking to have children, this is a great question to be asking.

To start with, you will be focused quickly on how baby is doing and finding the right baby things for you to be using, then after baby arrives, you will be too busy with baby to think about insurance.

One insurance thing you do need to put on the to-do list, is adding baby to your medical insurance cover within three months of arriving, this article talks more about baby. This post is about you as mum.

In general, if you have income protection you will have some disability coverage for the first 12 months after finishing work, if you are on maternity leave for longer than this, then things get a little more interesting.

ACC (Accident Compensation Corporation) is New Zealand's unique no fault accident rehabilitation and support system

Ok, most of you know about ACC covering you for your medical expenses to treat you and recover from an accident. 

If you have had an accident you probably found this to be partially funded and you had to pay something towards the costs, depending on what you needed to be done. Which is a little disappointing but medical expenses only go so far.

The other aspect people know about is the replacement of income if you are off work in an accident situation, where 80% of your lost income can be replaced after seven days while you recover.

The things people may not fully appreciate are the other benefits and situations ACC cover which you need to be aware of.

Most things in life tend to be a reaction after an event and what happens after is the 'cure'. It would be better if the event did not happen at all?

One theory is the food industry makes us sick so the drug industry can sell us a cure. It has been suggested but the evidence to support this is a challenge and in a complex world, it would be hard to prove.

Conspiracy theories aside, there are things we can do to improve our own lot. Eat fresh foods, reduce processed foods and exercise, are a few.

Policy anniversary letters, why does the premium always go up?

This is a common comment I hear from clients, that and 'It's got too expensive can you do some thing about it?' If you are a Willowgrove client you are likely to be getting your first or possibly your second anniversary letter from the insurance company, so this is relatively new for you, if you did not have insurance cover before we met.

The simple answer to the title is; you are a year older and age is part of how the insurance company assess risk. Bluntly put, being a year older the chance of you claiming has increased.

What is not always understood with the annual policy renewal is your cover level has probably increased too. In recent times the level of cover increases have been up as high 5% inflation, though the last couple of years have been a bit lower.

Have you got it insured correctly? Martin Hawes article here, raises a particually direct point about your house insurance if it is in a family trust.

As Martin outlines in his article, 'underinsurance also ought to be a worry for trustees of family trusts and other trusts.

Trustees are obligated to look after (and properly insure) the assets of a trust, and if they do not, the beneficiaries can demand that trustees make good any losses. This means that if we had simply accepted the default amount from the insurance company ($693,000) and the house burnt down and cost $1.1 million to rebuild, the trustees could be liable for over $400,000. This should have trustees thinking hard.

I cover a lot of ground in this post, though a bit of a lengthy technical one. Maybe that's part of the reason protecting incomes is not high on the completed tasks list, as policy details can get quite complicated.

I have mentioned before that income protection in New Zealand is not something that is well covered, much like the rest of the world. With about 80% of the population without financial support in a non-accident disability situation. This comes with potentially limited support with ACC. There is a lot of exposure not only for you personally, but also for your family members, co-workers, suppliers and clients.

What is the real risk?

Roy Morgan Research has published updated information on insurance coverage in New Zealand and it is not a particularly pretty picture.

What does it really look like out there in New Zealand?

Almost 1 in 7 Kiwi’s do not have any insurance cover at all. I don’t know about you, but 1 in 7 people I know are not financially independent enough not to need insurance cover at some level. This suggests Kiwi’s are taking the risk that ‘she’ll be right’. This may be knowingly but most likely unknowingly.

You are not alone; most business people comment that ACC levy invoices do not make much sense.

Part of the reason for this is the way ACC levies are calculated, some in advance and some in arrears. Often this is not in a sequential order so you might be paying this year's and paying a wash up on a year before last. This is usually because of the way you have reported your accounts; this is also across two or more levy invoices. Added to this the various components to cover the past and future risks ACC have, credits that happen if you have overpaid a portion calculated on a prior estimate.

Insurance is one of those things people do not like paying for and often bundle it in with power, interest, rates, tax and bank fees. Something to address when we really have to until then, we will ignore it and just pay the bill.

Insurance is about covering a loss, well a potential loss. Because you need to take insurance before you have the loss in order for it to work. People comment ‘but it should cover X, because I know about X and that is what I want cover for’. If you know about X then the insurance company is unlikely to bet on X because it is likely to be a sure loss for them.

In general terms yes. There is a but in there though, and it is a big one.

When you applied for your policy, did you; tell the truth, the whole truth and nothing but the truth? If you did, you are probably ok and have nothing to worry about, if you are unsure read on.

In English law, and carried through to New Zealand law, is the basic principal of good faith and truth when talking about contracts.