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Lizo Mnguni

HOW TO SPRING CLEAN YOUR INSURANCE POLICIES

With spring in the air, it is crucial for you to go through your insurance policies to make sure you are adequately covered.

Unprecedented events have resulted in trends being bucked, which means that many consumers are finding that they are not adequately insured. Unfortunately, this is being discovered when it is too late, at claim stage.

One event that has left policyholders either out of pocket or without benefits is an increase in vehicle values, driven by new vehicle shortages, parts shortages, computer chip issues, and shipping issues.

It is thus even more important to review existing policies, keep appropriate insurance cover in place, or adjust cover where necessary. Spring is an opportune time for households to review their basket of non-life insurance cover.

Here are some tips on how to “spring-clean” your policies:

1. Review your existing policies.

Reviewing your policies is one way to fight the rising inflation cycle, as it means you are empowered to understand inclusions, exclusions, claim processes, excesses, and how premiums work. The onus rests with you, the policyholder, to make sure you are insured for the right amount. Although your non-life insurance policy is automatically renewed annually, it is essential to confirm that you are insured for the right amount. This is because when your insurer calculates your premium, it’s based on several underlying factors, including market trends and movements, that influence the cost of insurance.

2. If you have made changes to your home or contents, update your cover.

It is important to update your insurer about any major changes to your property – such as home renovations or the addition of inverters or solar power to avoid loadshedding – to avoid any disappointments when an incident occurs that requires you to claim. In addition, carefully and regularly updating your household inventory provides an opportunity to update your cover and risk requirements.

The value of one’s home contents increases as the years go by and could now cost two or three times as much to replace. The cost of building a home has risen by 11% over the last 12 months, which means that the sum insured on your building cover also needs to be lifted.

3. Make sure your vehicle is insured correctly.

If the value of your vehicle does not accurately reflect the correct market value, you may need to consider top-up products. This will ensure you are not out of pocket when you claim. In addition, given that motor vehicle repairs are taking longer, it is important to expect delays. Car rental benefits are common in motor insurance policies to cover transportation while a vehicle is in for repair. As a result of extended vehicle repair times, it may be a good idea to increase the duration of car hire on these benefits.

4. Speak to your broker or insurer.

Some insurers are responding to these extraordinary times by providing innovative solutions. Discuss some of the issues in the market with your broker, who can help to ensure you have adequate coverage.

Lizo Mnguni

Mnguni is manager of optimisation at Old Mutual Insure.