The start of the year is an excellent time to assess your insurance coverage and adopt some good habits - for now, and in future.
Short-term insurer, PSG Insure, suggests you follow these short-term insurance guidelines to keep your coverage consistent.
WATCH : The various types of insurance you need for your home.
Declarations
Your insurance premium is based on your risk profile, which needs to be honest and accurate, taking into account your real situation. This means that you need to keep to whatever you declare to your insurer.
Check that your daily life reflects what your policy says. For example, if you drive around a lot for work or park at your place of work, make sure that your policy specifies that your vehicle must be covered for business or roaming.
The same applies to security features at your home. If you have an alarm, it must be activated. If your policy specifies a locking garage, it must be locked.
Area specifics
Some geographical regions are more of an insurance risk than others. For example, some areas may be prone to flooding or lightning damage, and in areas with dolomite, there may be a higher risk of ground subsidence.
Cover for your property in these instances needs to be specified, as it isn’t always included in a standard insurance policy. If you have moved into an area like this or already live in one, keep in mind seasonal rainfall and how it can affect you.
Take precautions where possible and make sure your policy is always up to date.
Replacement value
Trying to cut costs on premiums by not factoring in everything to be covered could cost you dearly when you try to claim.
Your insurer will only pay out a claim in proportion to the sum insured, and underestimating – or understating - the value of your household contents can be a costly mistake. If, for example, you are paying for contents cover for R100 000 while the real value of your goods is R200 000, you will be deemed to be 50% underinsured. Your insurer is likely to only pay out R50 000 of your R100 000 claim.
On the other hand, you should also avoid over-insuring. It doesn’t make sense to insure goods for more than they are worth.
This is why it’s important to have accurate replacement values for all insured items. You should review these at least once a year. This will ensure your premium is covering what you need it to and that your insurer will pay out the full amount of any claim.
Updates
It’s also important to update your policy when your situation changes or if you buy something new that needs to be included.
Updates should be addressed during your annual review, but your cover could be jeopardised if you forget to mention something or don’t provide accurate updates.
Any changes between reviews should also be communicated. Keep in mind that your policy can be amended at any time to accommodate changes. Be sure to ask for written proof that the changes have been included in the policy.
Fraudulent claims
Your insurance premium affords you peace of mind and protection for your goods, but some people view insurance premiums as a ‘grudge spend’. If you don’t need to claim, it might seem that you’re paying your premiums each month and not getting anything for the money you are spending.
It’s important not to mismanage your policy, thinking you paid a certain amount in premiums and should now claim excessively to ‘recover’ that money. If your insurer views you as a multi-claimant - and therefore significantly unprofitable - your policy could be cancelled.
If you are found to be lying about a claim or stop paying your premiums, your policy will be terminated – a situation best avoided.
Keeping to these guidelines will make it easy to keep your short-term insurance coverage consistent this year and in future.
Writer : Sarah-Jane Meyer