Is Your Insurance Policy Up to Date? Make Sure You’re Fully Covered
As we finally push through the long stretch of Janu-worry, many of us are eagerly awaiting that January paycheck to offer some relief. But it’s still a time for financial caution. Tightening your belt might feel necessary, but before you consider cutting back on insurance – often seen as a “grudge purchase” – it’s important to think about the consequences. Cancelling insurance may free up some cash now, but the risk of facing huge expenses in the event of theft, damage, or loss could leave you far worse off.
Ensure you’re not caught unprotected when you need it most.
Ensure All Your Valuables Are Covered
Over the past year, you may have made new purchases, such as a laptop, a television, or expensive jewellery. It’s crucial to update your insurance policy to reflect these new possessions. Equally important is adjusting your cover to remove any items you’ve sold or no longer use, like old phones or replaced computers. Keep your home contents policy accurate and up to date – it’s the only way to avoid nasty surprises.
Avoid Underinsurance and Understand the Rule of Average
The value of the goods you’re insuring should represent what it would cost to replace them today, not what you originally paid for them. For instance, a leather couch bought for R10,000 ten years ago might now cost R20,000 to replace. Insurers usually adjust your insured sum annually to account for inflation, but you should still review your cover regularly. If you’re underinsured, you may only receive a percentage of your claim. For example, if your couch is underinsured by 50%, you’ll only get R5,000 instead of the full R10,000.
Account for Home Renovations
If you’ve enhanced your home by adding solar panels, redoing the kitchen, or installing a pool, your home’s replacement value has increased. Both your home and its contents should be insured at their replacement value – the cost to rebuild or replace them with similar new structures or items. Regularly update your policy to reflect these changes, ensuring you’re fully protected in the event of a claim.
Check How Your Car is Insured
It’s important to know whether your car is insured at market value or retail value, as the difference can be substantial. Retail value is based on the prices listed in the Auto Dealers’ Guide, while market value reflects the adjusted retail value based on specific car makes and models. Ideally, you want your car insured for its reasonable market value, which accounts for real-time factors that influence pricing.
Adjust Cover Based on Your Actual Risk
If your daily routines have changed – for instance, if you’re now working from home or have a shorter commute – your exposure to everyday risks has likely decreased. This change could translate into lower premiums, so it’s worth reviewing your policy to ensure you’re paying based on your current level of risk.
In Short
By regularly reviewing your insurance policy and making these adjustments, you can avoid unexpected costs and ensure you’re properly covered. Insurance isn’t just about protection – it’s about peace of mind in uncertain times.
Don’t leave yourself vulnerable. Visit pogir.co.za today to speak to a short term consultant and ensure that your insurance coverage is exactly where it needs to be.