The lure of a low premium

Why it's important to look at the total cost of risk

As a real estate investor, you understand better than anyone that protecting your investments is essential. One of the first things that is often considered is the premium of property insurance. But is the premium really the only thing you need to pay attention to? We discuss why it is important to look at the total cost of risk when purchasing insurance, with the premium being just the tip of the iceberg.

What is the total cost of risk?

The concept of "total cost of risk" encompasses much more than just the premium of your insurance. It covers a wide range of factors, including:

Conditions

What are the specific terms and conditions of your insurance? Are there any limitations or exclusions that could affect coverage? This can ensure that (part of) the damage is at your own expense.

Deductible

How high is the deductible you have to pay in the event of a claim? And how much do you contribute to the costs yourself? A higher deductible can result in lower premiums, but can also lead to higher costs in the event of a claim.

Prevention measures

Do you need to invest extra in prevention measures, such as fire-resistant measures or reconstruction value inspections, to limit your risk? Prevention is often the key to reducing long-term damage and costs.

It's important to consider all of these factors to get a full picture of the costs associated with managing your risks.

Long-term returns

While it may be tempting to only look at the premium when purchasing insurance, the total cost of risk is much more important in the long run. By considering all the costs associated with managing your risks, you can make an informed decision that will save you money in the long run.

It's crucial to remember that the premium is just the tip of the iceberg, and there are many more hidden costs and risks underwater.

How can we help?

At Brickbase Insurance, we understand the importance of looking at the total cost of risk. Our team of experts is ready to help you analyze your risks and calculate the total cost of risk.

Contact us today for a no-obligation consultation and find out how Brickbase Insurance can help you optimize your property insurance and reduce the total cost of risk.