Economic instability as well as increases in living costs are weighing on South Africans, with 77% of consumers ranking inflation on everyday items as a top financial worry along with interest rates (55%) and job security (52%), according to the TransUnion Consumer Pulse Study`Q2 2024.
Due to these financial pressures, it is crucial to reassess your insurance to check if you are getting value for your money while still protecting your car, home, and belongings as we move into 2025.
Wynand van Vuuren, client experience partner, King Price Insurance, offers practical tip to ensure that your insurance is comprehensive yet affordable:
Identify your risks
According to van Vuuren, the first step is to understand where you are most vulnerable to financial loss.
You need to ask yourself how you would cope if your car was involved in an accident or if your home suffered fire damage. Could you afford to take care of the repair costs out of your own pocket?
"Some people opt for reduced cover on their cars to save money, but this potentially leaves them unprotected against accident damage, which is the most common type of claim we see," Van Vuuren said.
Evaluate your current cover
Ensure that you have a good look at your insurance policy.
Are you still paying to cover items you no longer own? Do you still have shortfall cover for cars that are already paid off? Has your vehicle aged a year, but you’re still paying last year’s premium? Do you work from home, making your house more secure because it’s always occupied?
Van Vuuren said that by showing that you pose a lower risk, you could qualify for a lower premium. You could also reduce your insurance premium by installing a tracking device in your car or upgrading your home security.
Value your home contents correctly
It is essential that the contents of your home are insured for their current replacement value, not what you originally paid for them.
High-value items stored inside your home like your phone, laptop, jewellery, sunglasses, watch, and gym bag are covered under your home contents policy, but as soon as you take them off your property they must also be covered as portable possessions.
Figure out what your buildings are worth
Van Vuuren said that for insurance purposes, the value of your home is not the same as its market value or what you bought it for.
"You need to insure your house for what it would cost to rebuild right now, including all aspects such as foundations, perimeter walls and swimming pool, as well as solar panels, taps and tiles," van Vuuren said.
"If you have made any significant improvements to your home, it is wise to increase your value. If you don't, you risk being underinsured."
Keep your information up to date
If there has been any change in your personal circumstances in the last year, ensure that you let your insurer know.
This can include changes to where your car is parked day and night or how many kilometres you drive each month, these can have a major impact your insurance premium.
Bundle your policies
According to van Vuuren, insurance companies often offer discounts to clients who hold multiple policies with them.
For example, you can save money by insuring your buildings, home contents and car with the same provider. Some insurers also offer discounts for covering multiple cars.
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