At a time when companies and individuals are trying to reduce expenses, there is a real danger that people will opt to under-insure themselves to save a few rands in the short-term. But Indwe cautions that this will have a significant financial impact when the time comes to submit a claim.
“The adage of, you get what you pay for, holds true in insurance as well. People might be tempted to go for a cheaper insurer or fit their home or business contents into the value associated with a premium, but when it comes to fundamental monthly expenses, insurance must rank up there with the likes of medical and life cover and be budgeted for accordingly,” says Joe Szemerei, executive director, individual and volume business at Indwe.
On a most basic level, being under-insured means a person is responsible for the shortfall if there is a claim. And at the most extreme, an insurer might opt to only pay a percentage of the claim, based on how much the client is under-insured by.
“When it comes to the likes of home contents, a person must make a list of all items being insured and, ideally, take a photograph of the high-end things as well. This might seem like a tedious task, but the benefits when the worst should happen make it worthwhile.”
Also, items should be insured at replacement value and not market value. While there is still confusion between the two, replacement value boils down to what it would cost to replace something if it had to be purchased today.
“Remember, insurance does provide the luxury of peace of mind that a business or individual is protected if disaster strikes but it has to be managed properly. Meeting with a trusted insurance advisor is a priority in this regard. People should consider the impact of inflation on all their items and update their policy when new things are purchased such as laptops, TV sets, and cars. When upgrades or renovations to property are completed, an insurance policy must also reflect the higher value.”
Having the right amount of cover, whether as a business or an individual, ensures the insurance process is as smooth as possible, without having to worry about accessing additional funds to replace something. This also avoids the policy holder becoming their own insurer and mitigates the risk of the financial shortfall that an under-insured claim will result in.
For more information on ensuring your insurance covers your business and personal requirements, please visit www.indwe.co.za or contact 0860 13 13 14.
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