Master Policy
It is common practice in Trinidad and Tobago for lenders and in particular, mortgage companies, to have an arrangement whereby all their borrowers can obtain insurance coverage under a master policy either with one insurer or a group of insurers. The purpose of this is two-fold:
• It allows for easy administration by mortgage companies since they do not have to track different expiry dates of insurance coverage for each of their borrowers, as the master policy has a common expiry date for all members.
• It allows for some negotiation of competitive premiums since each borrower receives only a Certificate of Insurance rather than a policy document, resulting in a reduction of the insurance company’s costs. The lender can also earn a volume discount as all borrowers are covered under a single contract.

The Master Policy, normally called a Houseowners Insurance Plan, is retained by the lender as the policyholder. As a borrower, you can request to view the terms and conditions of the policy contract.

Individual Policy
Once you own a house, it is advisable that you purchase homeowners insurance to cover your home.
If a mortgage exists, but the value of the property increases in keeping with the existing market, the home owner should arrange to upgrade the sum insured so that in the event of a total loss, compensation would be adequate.

Helpful Hints
• Exercise due care in safeguarding your assets, such as your home or household contents.
• Minimize the risks of loss or damage to your home e.g. by installing security systems (including ‘burglar-proofing’) and fire extinguishing devices.
• • Carefully examine the terms and conditions of the policies of various providers before choosing an insurer that best meets your needs.

HOMEOWNERS and HOUSEHOLDERS COMPREHENSIVE POLICY
The Homeowners Comprehensive Policy covers buildings, while the Householders
Comprehensive Policy covers household contents.

Homeowners Insurance
Insured Property
The insurer considers the insured property to be the actual building, walls, gates, fences and any fixed carpets and air-conditioning equipment. Any building attached to the main building that is deemed to be part of the location will also be covered. Swimming pools and retaining walls are not normally included under this policy and the homeowner must declare its existence to the insurer and set a value to be used as a ‘sum insured’ to obtain coverage.

Insured Perils
Some of the main perils that can cause loss or damage to the insured property include:
• Fire, including underground fires, lightning bolt, explosions, thunderbolts
• Riots, strikes, lock-outs and/or labour disturbances and/or persons of malicious intent (this is commonly known as the riot strike and malicious damage extension)
• Aircraft or other aerial devices or any article dropped from them
• Water damage resulting from busted pipes or taps or overflowing water tanks
• Theft including burglary, house breaking and larceny
• Impact on property by a motor vehicle, horse or cattle (must not be owned by/or in the care and control of the policyholder)
• Breakage or collapse of radio or television aerials or antennae masts. What is covered is the damage caused to the home by these items not replacement of the aerial or antenna
• Falling of trees or branches (covers damage to the home)
• Smoke
• Catastrophe perils such as earthquakes, volcanic eruptions, cyclones, windstorms and floods
• Floods that result from other causes beside hurricanes or wind-related perils
• Collapse due to subsidence or landslip.

Uninsured Perils
Some perils that can cause loss or damage to the insured property but which are not covered under the policy include:
• War
• Radioactive and nuclear risks
• Malicious damage caused by someone lawfully on the property
• Terrorism and consequential loss
Note - Perils covered may vary from one insurer to another.

Helpful Hints
• Insurers usually impose a policy excess of between $500 - $1,000 for any claim for “riot, strike and malicious damage” caused by someone not lawfully on the property.
• The cost of repairing the burst water line is not covered. Coverage is for damage caused by the water only.
• Policies normally include a clause which states that the building (property) must not be left unoccupied for an extended period of time, usually not more than 30- 60 days. This clause may vary from one insurer to another.
• In the case of a theft or burglary claim, there is an excess and compensation is confined to repairs to the building.
• Damage caused by fallen trees is covered where it is as a result of an insured peril e.g. windstorm. Policies will not cover the cost of removing fallen trees or branches, damage caused to gates and fences by fallen trees and branches if the damage is caused by you, the policyholder, or someone working under your control cutting branches or felling trees.

Treatment of Excess:
• For claims caused by catastrophe perils, there is normally an excess of 2% of the sum insured, with a minimum amount, whichever is greater.
• In the case of a wind-related claim, the excess may be 1% of the sum insured.
• For earthquakes, the excess is no less than 2% of the sum insured.

For example, if the building is insured for $500,000, the catastrophe excess of 2% of the sum insured means that the insurer will pay a claim only if the damage is more than $10,000. Similarly, if the sum insured is $1 million, the policy excess would be $20,000