Insurance can be a tricky business, particularly if you don’t work in the industry. The terminology can be quite confusing and there is nothing more frustrating than only realising what the terms and conditions actually mean, when you want to claim.
Don’t worry, Indwe has your back! Let’s unpack the four most common misconceptions, so you can avoid any nasty surprises.
1. The “average” clause
If, according to our calculations, the amount needed to replace all your private residential structures with similar new structures at the time of any loss or damage, is more than the insured amount, we will not pay you the full amount of the loss or damage. You will be your own insurer for the difference between the insured amount and the amount needed to replace all the private residential structures. Therefore, you will be responsible for a proportional share of the loss or damage.
Let us assume you are insured for R 1 000 000, but the replacement value of your property is
R 2 000 000. This means you are only insured for half of the replacement value and you must cover the other half.
For example, if you suffer damage to the value of R 200 000, we will only pay half of this amount, which is R 100 000, which will be calculated as follows:
|Insured for||R 1 000 000|
|Replacement value||R 2 000 000|
|Claim||R 200 000|
|Calculations: Underinsurance||R 200 000||x R 1 000 000|
|1||x R 2 000 000|
We will only settle you R 100 000.
How can you avoid the nasty? Check that you aren’t underestimating the replacement value of your possessions, to avoid having to partially fund any replacements. Speak to your Indwe advisor – we are here to help you.
2. “Policy wording” vs “policy schedule”
Policy schedule is a summary of your cover, the amounts and the details of who and what is covered. It will include all the information around your household, security measures, drivers and occupants, and all personal information. It also states the insured amount, and the excess payable.
Policy wording has all the details of what you are covered for and what the exclusions are. It is important that you are aware of both.
How can you avoid the nasty? You have to read these two in conjunction with each other. Talk to your Indwe advisor if you need any further clarification, as you need to know what you are covered for and, more importantly, what you are not covered for.
The little word “maintenance” has huge implications. The upkeep of a home or building is the owner’s responsibility. For example, waterproofing your roof, cutting back trees, cleaning gutters, and maintaining car ports and garage doors all fall under the owner’s responsibility.
How can you avoid the nasty? Make sure you take care of your belongings and keep proof of any upkeep. This way you can prove that your claim is not the result of a lack of maintenance.
4. “Changing Risk Details”
Remember that insurance is a three-way street: there is you, your broker and the insurer. At Indwe, we try our very best to ensure that all your needs are met, and we will help you as much as we can, based on the information your advisor has about you, as provided by you.
How can you avoid the nasty? If you change your address or do renovations or have another baby – let your broker know. It is important that your Indwe advisor is kept well-informed about changing circumstances that could affect your risk and insurance.
To avoid nasty surprises, speak to your trusted Indwe advisor today. Visit www.indwe.co.za or phone 0860 13 13 14 for the right advice, to ensure that you are adequately covered.
Indwe is an Authorised Financial Services Provider. FSP: 3425