By: Bertus Visser at PSG Insure
There are many aspects of life that ‘go without saying’, yet some of these could do with a little conversation. A great example is keeping clear communication with your adviser or insurer, so that any assumptions you might have about your insurance cover can be cleared up. Here are some common examples to consider, especially as we begin a new year.
We all feel costs are constantly rising, and in many cases this is true. If you haven’t reviewed your contents cover for some time, or the value of each item you are insuring (these collectively make up how much contents insurance you need), you could end up being over- or underinsured.
Insuring more than you own is just as non-sensical as not insuring everything you own. If you are overinsured, you don’t stand to gain a bigger pay-out on a claim, while being underinsured just means your loss will not be covered in full. You need to find the right balance, which doesn’t come from assuming you are covered because you reviewed your insurance a few years ago.
Many of us forget about the extra gadgets or furniture purchased or given away – all of these have an impact on how much insurance you need. You may have bought new furniture, or you might be moving and downsizing. Review your cover at least annually, to ensure your cover strikes just the right note.
Taking things at face value
Keep in mind that insurers tend to automatically increase the value of your household contents or building by between 8% and 10% annually. A close eye on the escalation is best, as what you own might not have increased as much as your insurer has included in your policy. There may be room for negotiation.
Oh, hail the assumption
You might assume your insurance covers you for hail, but until you’ve checked the fine print or confirmed it with your adviser or insurer, don’t expect a dent in the price of hail repairs either. The same applies to so many more examples.
Cover for keys and locks does not get enough attention, yet these items can so easily be lost or stolen. To replace a key on some vehicles these days can be upwards of R15 000, so neglecting cover for these can be a really frustrating loss, when you could instead check if you are covered and top up before it’s too late.
Many of us have begun to think differently about working and the way we live. Lockdown allowed for avoiding traffic, and working from home is no longer just the freelancer’s dream. Keep in mind that the largest contributing factor to your monthly premium is likely to be your vehicle. Should you now work from home half the time, your risk is potentially reduced, and it could influence your short-term insurance premium.
Some insurers are basing lower premiums on the year model of vehicles, while others are looking at reduced kilometres. Don’t assume your policy can’t benefit from these changes too. If you have been putting off re-evaluating, do so soon, but keep in mind that if the change is temporary (perhaps you are going back to fulltime office work in March, as an example), you need to restore cover for when your daily commute resumes.
Getting ‘all risk’ right
You can make some adjustments to your insurance cover to get a better rate while still remaining covered against important risks. For example, some insurers offer up to 20% of your contents cover to go towards all risk items that do not need to be specified. These attract a cheaper premium and you can enjoy worldwide coverage at a fixed rate, but you have to check what is possible with your provider and if something like this would work, based on your risks.
The core of insurance is to put a client back in the same position they were in before a claim, based on that market-related premium, coupled with preventing the incident from happening in the first place. Choosing the right adviser goes a long way towards achieving insurance success. Making the wrong assumptions about your cover can work against you, and cost you more than you bargained for.