How to spring clean your insurance

Karen Naidoo, Managing Director of Old Mutual Insure’s MFRF

Whether you celebrate Spring on the first of September or the 22nd to coincide with the Spring Equinox, the start of the new season brings an opportunity to clean out the clutter. It’s also a great time to “clean up” your financial affairs, starting with your insurance.

“Your short-term insurance policy is automatically renewed every year, but just because it is automatic doesn’t mean you should sit back and do nothing. Doing the proper due diligence by reading and understanding your policy and confirming you are insured at the right amount is essential to avoid a claim mishap if disaster strikes,” explains Karen Naidoo, Managing Director of Old Mutual Insure’s MFRF. 

Naidoo says that doing an ‘annual spring clean’ on your insurance policy can help put money back into your pocket. 

“There are many ways that consumers can actually end up saving money because they reduce the risk of their claims being rejected and could also benefit from lower premiums by being a good insurance customer.” 

Naidoo adds that this is especially relevant during COVID-19 given that many consumers have been feeling the pinch.

The impact of pandemic life on risk profiles

During the pandemic people spent less time on the road and behind the wheel, which means that policyholders who experienced a change in driving habits, should have experienced a reduction in their insurance premium. Individuals also adapted their spaces to their changing lifestyles, and put money, that would normally be spent on things like travel, into their homes in the form of property upgrades. 

“We’ve seen a significant increase in remote working, with a spike in homeowners installing equipment designed to improve their ‘work from home’ experience. It makes sense  to update/review your homeowner’s insurance policy or take out an additional policy specifically related to working or conducting business from your home. This is because generally a personal homeowner’s insurance policy is not designed to cover a home-based business, work completed under part-time or full-time employment,” explains Naidoo.

Naidoo says that as things return to a more adjusted “normal” given the vaccine euphoria, and behaviour changes to driving more, or returning to the office, it is even more vital to check that you are properly insured and inform your insurer of any changes.

“The pandemic has ushered in a season of so much change. Homes have become offices, classrooms and gymnasiums. Is your car spending more time in the garage at home where it is secure, or more time on the street at the office? Changes in lifestyle impacts an individual’s risk profile, and so it makes sense that your insurance premium adjusts accordingly. Remember to let your insurer know about such changes.” 

Below Naidoo provides a few vital tips on how to spring clean your insurance.

Dust off your home insurance

Regularly maintaining your home

  • When it comes to home contents insurance, carefully and regularly updating your household inventory could provide an opportunity to update your coverage and risk requirements.
  • Claims determined as a result of poor home maintenance, or negligence, are most likely to be rejected, therefore failing to properly maintain your home could result in an increased risk of insurance claim repudiations. 

Ensuring that home contents are insured for the correct replacement value

  • For most consumers, the contents of their home are likely to change from year to year as they purchase new items. 
  • As a result, the correct value to replace these possessions must be provided to the insurance company to avoid underinsurance in the event of a claim.

Testing the home alarm system on a regular basis

  • All homeowners’ insurance policies will stipulate that it is the policyholder’s responsibility to keep the alarm system in full working condition, because if theft takes place as a result of a faulty alarm, then the claim is likely to be repudiated. This also includes an alarm with a flat battery.

Conducting frequent valuations of home contents

  • Home contents value increase as the years go by and could now cost twice or thrice as much to replace. 
  • It is so important to conduct regular valuations and provide updated values to the insurance provider to ensure adequate cover.

Polish your motor insurance 

Reviewing your insurance policy annually

  • When a motor insurance policy stipulates that cover is only provided for a specifically named driver, an insurance claim will only be successful if this driver was behind the wheel at the time of the incident.
  • If other people will be driving the vehicle from time to time it is important to check what the implications of this are for the policy.

“Being sure of what your insurance policy covers can give you a spring in your step as you step out to enjoy the warmer weather this season,” concludes Naidoo.

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