Insurance 101: Get the most from short-term insurance
One thing the Covid-19 pandemic has taught us, is that nothing in this life is certain or predictable. It's a lesson that homeowners should keep in mind when considering insurance, as being over-insured puts unnecessary strain on your budgets, while under-insurance could leave you devastated if you need to claim.
Homeowners or building insurance and household contents insurance are essential policies that all homeowners should have in their portfolios. We have covered these extensively in our Insurance 101 series.
There are, however, other short-term considerations that homeowners should contemplate to ensure peace of mind.
Combine with car insurance and save
Consolidating your household contents and vehicle insurance policies is one of the easiest ways to reduce your monthly premiums without exposing yourself to greater risk. Speak to your insurers about your options and the potential savings you could achieve but make sure to ask about any changes to your excess payments and policy exclusions.
Getting detailed quotes from other insurers will help you understand your policy options better and the potential for savings as well as the differences in excesses and exclusions.
While you're speaking to your insurers, ask about any security upgrades you could do that would lower your monthly premiums. Not only will this give your monthly budget a bit more breathing room, but it will also improve your family's sense of comfort and security while at home.
Backup your bond
What would happen to your home and home loan if you were retrenched or became ill, disabled, or died? How would this impact you and your family? These are not questions you might like to spend too much time thinking about, but they are critical to your future security.
A home loan protection plan or bond insurance protects you, your family and your home when disaster hits. In the case of death or permanent disability, this policy will settle the outstanding amount in your home loan; while in the case of retrenchment or temporary disability, the policy pays your monthly bond repayments for a set period such as 12 months.
Make sure to speak to insurers about the monthly premium payments and how often they reduce the instalment to reflect your home loan repayments.
Security for sports and hobbies
Most insurers offer an 'all risks' component in their household contents policies to cover items such as jewellery, watches, phones, laptops and handbag contents that tend to leave the home with you. However, your cover may not extend beyond these. Speak to your insurer about coverage for sporting equipment such as golf clubs, bicycles, technology devices and hobby equipment such as cameras.
Be sure to make accurate representation of the level of your use, as a casual weekend cyclist is going to have a different risk profile to an amateur race cyclist that travels around the country to participate in competitions.
Bear in mind that failing to accurately disclose the type of usage could result in your claim being repudiated in its entirety.
Bank on business insurance
If you are now working from home, started a side-hustle, established a home business or relocated an existing business to your residential property, it is time to speak to your insurer to make sure your additional needs are covered, and your existing policy is not nullified.
Read our Working from home - are you still covered? article to understand the insurance repercussions and your options.
Reduce the load of loadshedding
All indications point to South Africa's loadshedding woes continuing for at least another few years. Added to the inconvenience of extended power outages is the risk to home appliances, entertainment systems, technology devices and various fixtures as a result of sudden electricity cuts and power surges.
Using surge protectors at plug points and turning off the power supply at the main electrical box until 10 minutes after electricity has been restored can help to reduce the risk of damage, but it cannot remove the risk entirely.
Speak to your insurers about whether your policy already contains loadshedding protection and to what value. If this is not enough for your needs, consider increasing the value or taking out a separate policy.
Stick with SASRIA
The widespread damage done during the 2021 protests and riots left many businesses, homeowners and individuals devastated as they realised their insurance policies did not cover this type of special risk.
Adding SASRIA coverage to your policy is low-cost and provides protection against damage to property caused by special risks such as politically motivated malicious acts, riots, strikes, terrorism and public disorders.
Rental risk
Our economy has been hit hard by Covid-19 and many South Africans are turning to house-shares, long and short-term rentals and even trying out Airbnb opportunities. Being a landlord is not just about collecting extra cash at the end of the month, as many find themselves facing financial or legal woes before too long.
There are several insurance options for landlords to consider; however, your first port of call should be with your homeowners or building insurer and your household contents insurer. This is essential as your homeowner’s insurer may not cover tenant damage to the property as an example, and your household contents policy may be entirely nullified because of the increased risk of additional people having access to your property.
In some cases, you may even have to invest in business insurance or increase your personal liability or third-party insurance to cover yourself against claims for accidental death, illness or injury on your property.
Prospective or existing landlords should also investigate insurance options that will step in to protect your rental income if your tenant defaults on their monthly rent. An additional option worth pursuing is a specialist policy that will provide you with legal assistance or cover your legal costs if you need to take action against a defaulting tenant or have to pursue an eviction. The latter is particularly important as getting an eviction order can be exceptionally expensive and it can take years to finally get the go-ahead from the courts.
Cybersecurity care
Although cybersecurity insurance is a relatively new addition to the personal insurance portfolio, it should not be under-estimated or dismissed.
Cybersecurity insurance protects individuals from a wide range of internet-based threats that have come about with the spread of technology. These include assistance and coverage in situations including theft, cyberbullying, online scams, ransom attacks, and device and information recovery.
Protect your best friend
If you've ever had a sick pet, then you'll know how expensive veterinary bills can get. What's more, many veterinary practices now require a down payment or refuse to offer payment plans due to the high number of people who have defaulted on their bills.
Protect your bank balance with pet insurance that will cover your normal veterinary costs, while ensuring your best friends get the care they need in the case of an accident or chronic illness.
