Quick, easy to understand pointers on insurance
By Riaan Vermeulen
MD Old Mutual Short-Term Insurance Company.
Insurance can be an overwhelming topic. Faced with reams of documents, most of us tend to skim over the words, flip to the last page and simply hope for the best. Not wise, because in the event of having to make a claim, ignorance of the facts can make an unwelcome difference.
There are a few hard and fast rules which make a world of difference when it comes to submitting successful claims. Take a look at Old Mutual’s advice set out in simple, plain language, focussing on the important points.
What do most people tend to overlook when taking out insurance on their home and assets within their home?
When we buy short-term insurance, it’s to protect our vehicles, household contents and our homes against fire/loss/structural damage (this latter one, Homeowner Cover, is usually compulsory if you have a home loan).
It’s a benefit that it’s tailored to your personal needs. You have a say here.
Most of us underestimate the full value of our homes and contents – we ‘guess’ the value, instead of insuring for replacement value and NOT the current market value. It’s important to calculate what it would cost to rebuild your home, and replace every item inside it, therefore, insure for their replacement.
There’s an easy way to determine the total value. Just keep an inventory of each room’s contents. That way, you can use it to calculate the total value at risk when submitting a claim.
How regularly should your insurance policy be reviewed and what is involved in the process?
Ideally, every six months, but at least once a year – prices fluctuate during a year and you accumulate new possessions. You are aiming to replace these, so the estimate should be the price you would pay for them today. Similarly, the replacement value of your home or building should be adjusted once a year.
What should I look out for when choosing an insurance company?
Do some homework, it’s well worth it. Look at the reputation and values of the insurer, its product offerings, ability to pay your claims, and even its involvement in your community. Take Old Mutual. They’ve been operating in Namibia for 100 years, and have paid out over N$400m in Short-Term insurance claims for the past financial year. That’s comforting.
You don’t want to pay a premium and assume you have cover, only to find out when it matters, that you don’t have the right cover or the insurer is unable to pay out your claim.
Prepare yourself well. Think of scenarios of possible claims – you know your lifestyle and circumstances better than anybody else. This will ensure you are sufficiently covered.
Why is property insurance so important?
It covers you for more than you think.
Not only are you covered against all kinds of damages caused by fire, natural disasters, and other risk factors, but also the risk of loss due to theft or other criminal acts (as well as other kinds of risk). In other words, it guarantees your continued financial existence should a disaster/crime occur on your property and/or its contents (including day-to-day mishaps).
These losses can stretch into hundreds of thousands of dollars.
What can I do to decrease the amount I pay on my monthly insurance premiums for my home, especially during the COVID-19 pandemic?
The coronavirus outbreak has caused widespread concern and increasing economic hardship. Old Mutual has business continuity plans in place to manage the unknown variables of an outbreak like COVID-19.
Bear these facts in mind should you consider reducing your Short-Term Insurance premium.
The better security measures you have in your home, the lower your premiums.
Choose a limited cover option which excludes theft.
A standard compulsory ‘excess’ is normally applied per claim. In other words, you are obliged to pay in a certain amount per claim. Consider reducing your monthly premium by paying a higher voluntary excess fee.
What are the different types of home insurance?
Homeowner cover – this covers loss or damage to the actual structure of your property. It covers the cost of replacement and repair as well as any resultant damage. For example, if your house floods due to a rain storm, burst geyser or pipe, this insurance covers the cost of repairs.
Household contents insurance – any damage or loss suffered to your personal possessions while they’re in your home (clothes, appliances, furniture, etc). It is strongly advisable to take out All Risk cover in respect of items carried on your person, or regularly taken out of your house (cellphone, sports equipment and jewellery).
What are the most important rules when putting in an insurance claim, so it’s not rejected?
Submit your claim with all supporting documentation, such as a police report (if it’s a crime); list of stolen/damaged items with quotations; damage report, and anything else the company requests. Claims must be submitted within the prescribed time, usually 30 days.
Be 100% truthful about the occurrence and provide answers to all the assessor’s questions.