Monday, 21 January 2019

Managing student asset risks with appropriate insurance cover

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The start of the academic year is a tough time for many parents when it comes to managing the spiraling costs that come with sending a child to school or university.  Besides tuition fees, there’s the realisation that all the electronic gadgets such as tablets, phones, laptops and iPads, along with uniforms and sports gear constitute a very hefty financial investment – one that will remain constant throughout your child’s education years.

Portable assets

“It’s easy to underestimate the combined value of your child’s valuable, sophisticated and portable assets.  When you add up the value of gadgets such as tablets and smartphones and watches, sports gear and apparel as well as branded school bags, uniforms, textbooks and stationery, it’s soon very evident that you need a holistic insurance plan in place to mitigate the risk of theft, accidental damage or loss which could leave you seriously out of pocket,” explains Mandy Barrett of insurance brokers and risk Advisors, Aon South Africa.  

“It’s advisable to consult with an expert insurance broker to check that such items can be covered under your insurance policy, and especially to review and understand the “All Risks” section of your household contents cover,” explains Mandy.   

In some policies, you need to specify the items to cover under All Risks that are typically removed from your home such as smartphones, smartwatches, laptops and so on.  Remember that household contents cover is applicable to items that stay within your home. But as soon as an item is removed from your home for whatever reason, it ceases to be covered unless specified under ‘All Risks’.

“There is also a common misconception that the contents of students’ residences are uninsurable because it is regarded by insurers as a ‘communal area’, presenting a much higher risk.  While this may be true with more basic insurance policies, it is possible to arrange affordable cover for these risks linked to your household contents cover.  It’s advisable to discuss your insurance needs with your broker who will be able to advise you and arrange the most appropriate insurance cover for these needs,” says Mandy. 

Student vehicle

It’s every young person’s dream and every parent’s nightmare – the keys to your child’s first car.   “Besides the nostalgia surrounding your child’s impending independence, there are important insurance considerations with being a young and inexperienced driver,” says Mandy.  Aon offers the following important tips:

  • Check the terms and conditions of your insurance cover.  If your child is the regular driver of the vehicle, it must be noted on your motor insurance policy as it is a key aspect when insurers rate a policy.  Failure to do so would be viewed as non-disclosure that could potentially lead to a claim being repudiated at claims stage.
  • Telematics is a young driver’s best friend when it comes to building a track record and profile with an insurer. Stick to the speed limits, avoid harsh braking and turns, drive responsibly, attend an advanced driving course and use Uber instead of driving late at night and get a better premium rating based on responsible driving behaviour. 
  • Comprehensive motor insurance is the widest level of motor insurance cover available, covering accidental damage to your vehicle in addition to third party, fire and theft. Check your cover, some of the more ‘no frills’ policies require you to ‘buy up’ for additional cover such as towing fees, hail damage, roadside assistance and so on.
  • Adhere to the provisions of your insurance cover such as security requirements – a tracking system, immobiliser and parking in safe, locked premises at night. 
  • Don’t get sucked into low premium pitfalls - while premiums may be cheaper, the catch comes in with reduced cover and/or a very high excess in the event of a claim.  Always talk to your broker and get professional insights on what’s practical for your specific circumstances. 
  • Don’t buy a high-powered, expensive first car, as an inexperienced driver is unlikely to handle the power and speed.  Safety and reliability should be a primary consideration, so be sensible in your choice.
  • Drinking and driving are off limits.  Besides being illegal and a serious risk to yourself and others on the road, an accident caused under the influence of alcohol or a drunk driving charge will wreck your risk profile for good.   

“When it comes to protecting your child’s portable assets and car, a professional insurance broker has the experience and specialist knowledge to help you find the best cover that’s the right fit for your needs and unique circumstances.  Consult your broker today to ensure your child is off to a smooth and safe educational New Year,” concludes Mandy.