2019 may already be well underway, but it's never too late to assess your cover and put some good practices in place for now and the year(s) ahead. We’ve pinpointed some short-term insurance resolutions to follow to keep your cover consistent.
I will stick to my declarations
Keep in mind that what you declare to your insurer, you need to practice. Perhaps you swapped cars with your spouse but have forgotten to switch who is the regular driver on your policy. It’s best to check that the way you are operating in your daily life mirrors what your policy says; that your vehicle is noted for business or roaming if you drive around a lot for work, or park at your office.
The same can be said for security features at your home. If you have an alarm, it needs to be activated. If you have a locking garage, it needs to be locked. Your insurance premium is based on your risk profile, which needs to be honest and accurate, taking in to account your real situation.
I will be aware of any special considerations in my neighbourhood
Some areas have dolomite, making subsidence a higher-risk. PSG has seen an increase in sinkhole claims, which is why insurance is so important. Cover for your property in these instances needs to be specified, as it doesn’t always come standard with an insurance policy. If you’ve moved into an area like this, or already call it home, keep summer rainfall and how it can impact you in mind, taking precautions where you can and making sure your policy is up to date.
I will not underinsure my contents
Underinsurance represents the worst-case scenario in a large claim. By thinking you don’t need to factor everything in to cut costs on your premiums, could mean undermining your own cover. Your insurer will only pay out a claim proportionately to the sum insured, and if you have underestimated the value of your household contents, it can be a costly mistake. If for example, you have R100 000 in contents cover but the real value of your goods is R200 000, your insurer is likely to only pay out R50 000, because you’re 50% underinsured.
Conversely, over-insuring should also be avoided as it doesn’t make sense to insure goods for more than they are worth. Just like you shouldn’t be selective and only insure a few items, you shouldn’t over-pay. This is why having an accurate replacement value, which is reviewed at least annually, pays off and will ensure your premium is covering what you need it to.
I will not forget to communicate changes
Failing to update your policy when something changes, or you buy something new is an error easily avoided. During your annual review, updates will usually be addressed, but if you forget to mention something or do not put through updates accurately, your cover could be jeopardised. Any changes between reviews should be communicated as well. Your policy can be amended at any time to accommodate updates. Be sure to note written proof that the changes are carried out as well.
I will not lie to my insurer or try to ‘recover’ my premiums
In today's economic climate, you can't necessarily afford to counter a big financial loss, but insurance premiums are still heavy on the pocket. While premiums are pricey, they are considerably less than what you might need to pay after suffering a loss. Your premium buys peace of mind and protection for your goods. If you don’t need to claim, it might seem frustrating that you’re paying your premiums each month and seemingly not getting anything out of it.
Do not be ignorant about mismanaging your policy though, thinking you paid a certain amount in premiums and should now claim excessively to ‘recover’ that money. If you are seen to be a multi-claimant and therefore perceived to be significantly unprofitable, your policy could be cancelled by your insurer. If you are found to be lying about a claim or stop paying your premiums, your policy will be terminated. These situations are all best avoided.
These key resolutions can be easy to stick to and follow when working with an adviser, keeping your cover consistent this year and always.