Question

RISK MANAGEMENT AND INSURANCE

Imagine that you are relaxing on your sofa on a Saturday afternoon and the mail arrives. You parse through the mail and find a letter from your home owner's insurance company. Upon opening the letter you read that the insurer indicates that they will not renew your home owner's policy unless you have railings installed on your front brick and bluestone stairs. You gaze out the window and confirm that some neighbors have these railings while most do not. Such railings could cost you upwards of $1,500 to install and at the present time your budget does not have sufficient funds to cover the cost. Nor do you have a credit card available to cover the cost of the railings.

What steps would you take to address this stiuation?

Answer 1

I would contact the insurance company and try to ask for more time regarding the fulfillment of the condition. I would explain my difficulty in fulfilling the condition at this point and would ask for an additional time of 2-3 months from them. I am sure I would be allowed the reprieve on the basis of my good track record with them.

In the case, the company refuses to allow me more time, I would ask my company to loan me a sum of $1500 which I would pay in monthly installments from my salary. My company has a policy of lending money to the employees in need and until now, I haven't used the service. I think I will be considered for the immediate loan.

In case, above all fails, I have a small set of family and friends who I think will be able to help me out in the situation. My salary is comfortable, therefore, paying back the loan wouldn't be a problem and as such, I think I will be able to comply by the terms of the letter in due time, in case the company refuses to extend the time.