Its always a good practice to review household insurance with an eye to save on your monthly premiums but don’t fall into the trap of cutting corners on your insurance policies.
This warning comes from Riana Wiese, an insurance adviser at PSG Insure. She says there are good ways to cut your insurance costs and save a little extra month to month, but it can be catastrophic for your finances if you need to claim and find yourself underinsured.
“You may be able to find a cheaper policy for your house or car, but in most cases you’ll discover that the cover is limited and that the terms and conditions put you at a disadvantage in the event of a claim,” says Wiese.
She points out three essentials of short-term insurance t consider when doing your review or taking up new insurance.
On home insurance
For most people, your home is the most valuable asset, and a catastrophic event such as a fire could have devastating financial effects if they are not adequately insured. “This is definitely not an area for shortcuts, and it’s important to ensure you are adequately insured with a well-established, reputable insurer,” says Wiese.
“When it comes to insuring your property, make sure that you are covered at the current building costs per square meter and make provision for any outside extras such as your paving, swimming pool, tennis court, fencing etc.”
On household contents
Wiese says many people overlook the fact that household contents need to be insured for their current replacement value – and not for the amount they cost you they were bought. It is important to revise your sum insured on an annual basis to keep up with inflation and increasing costs.
On car insurance
She says car insurance is an absolute must-have. Your policy should provide cover in the event that you were negligent and caused the accident as the other party would be able to hold you liable for any damages to their vehicle, as well as medical costs. “This can easily cause financial ruin if you are not adequately insured, and given the high accident statistics in South Africa it is simply not a risk anyone can afford to take,” says Wiese.