After over a
year of lockdowns, many South Africans have vastly changed circumstances.
Managing one’s finances and finding ways to cut unnecessary expenditure has
never been more important. As National Savings month draws to a close, Santam
shares tips on how decluttering your insurance can help you ensure you are
adequately insured at the right price.
Contracts
with short-term insurers tend to be automatically renewed, which means cover
may be outdated and inadequate. It’s vital to do annual check-ins to go over
the finer details and ensure a policy is up to date. An annual insurance
‘spring clean’ is highly under-rated and should be part of getting a financial
house in order. Plus, it might save money in the long run.
Marius
Neethling, Personal Lines Underwriting Manager at Santam, gives five tips on
how you can clean up your insurance policy.
1.
Adjust the amount you’re insured for: The main
reason for reviewing your policy is to make sure that you are insured for the
right amount – this is what insurers call the ‘sum insured’ or ‘limit of
indemnity’. Over the course of the past year, you may have bought a brand-new
bicycle and a couple of other items, all of which mean you will need to adjust
the contents of your home insurance cover. Or maybe, the value of your car has
depreciated, and you want to lower the premium you pay, accordingly.
2.
Underinsurance: This may sound obvious, but,
except for motor insurance (see below), the value of the goods insured should
equal what it would cost to replace them today, not the original purchase
price. Very often, we find that goods remain insured for their original value –
for example, a leather couch bought 10 years ago would be insured for R6 000.
But to replace the couch might be R20 000 today. For this reason, insurance
companies usually automatically adjust your sum insured each year so that the
covered amount keeps pace with inflation, and this should be made clear in your
policy document.
3.
The structure of your home: If you’ve enhanced the value
of your home by replacing your roof, redoing your kitchen or installing a
swimming pool, you need to increase the amount your house is insured for. Your
house (its structure) and your belongings (the contents of your home) must be
insured at their replacement value – that is, what it will cost you, at the
time of a claim, to replace/rebuild the building (your home) or belongings with
similar, new structures or items.
4.
Your car: Your car should be insured at
a ‘reasonable market value’. Reasonable market value is the retail value, which
is what a dealer would sell it for, considering its age, the mileage, the
condition of the car and any extras. If you’re wondering what your car is
worth, contact your broker or insurer directly (should you not have a broker)
to work out the reasonable market value of your car. You can use Santam’s car
calculator to do so.
5.
Save on car premium: As a result of the Covid-19
pandemic, the daily driving routines of consumers have changed significantly.
As a result, there are fewer vehicles on the roads, with less exposure to
everyday risks. In response to these changing circumstances and the evolving
needs of clients, Santam offers the SmartPark distance-based vehicle insurance
benefit - where clients’ insurance premium will be recalculated and discounted
based on the revised number of kilometres they are likely to travel in the
foreseeable future – all without having to restructure their policy or compromising
their cover. It’s simple: If you are driving less than 15000km a year, you
could save up to 20% on your insurance premium.
It is
important to ensure that you update your insurer about any major changes to
avoid any disappointment when an incident that requires you to claim occurs.
Help us help you by ensuring that you are adequately insured for your household
contents, building and vehicle.
Photos by Pixabay
written By Vernon Pillay
Article featured in Insurance on line (iol.co.za)