Time to dust off and reflect on your insurance policies

[Sep 2016]:  It’s time for the honoured ritual of cleaning out the cobwebs and getting ready for Spring.  It’s also the perfect opportunity to divert some of that enthusiasm into tidying up your home and motor insurance policies, ensuring that you have the best cover in place for your specific needs.     

“Our lives change and evolve constantly, which demands that your insurance covers keep pace with your changing appetite for risk.  Your life may be vastly different to what it was a year ago and that is where the expertise of an insurance broker will go a long way in helping you to objectively analyse your risks, and ensure that your insurance cover is 100% fit for purpose,” says Mandy Barrett of insurance brokerage and risk advisors, Aon South Africa.  

As a leader in the arena of specialist advice, Aon offers the following checkpoints to temper whether your insurance properly addresses your needs:   

1.    Do you have enough homeowners insurance to rebuild your home, from scratch?

It is human nature to believe you won’t ever face a major catastrophe, but if you lost your home and contents in a fire, would you be able to replace the structure and contents at today’s prices? Thanks to the rise in property replacement costs, your home could be significantly under-insured in the event of a major catastrophe such as a fire, earthquake or flood. 

Did you know, that:

• 70% of all claims that are rejected by insurance companies are due to bad maintenance such as a lack of waterproofing or rising damp.  Spring time provides the perfect opportunity to address those problem areas in and around your home.
• It’s a good idea to inform your broker of any additions or changes that you make to your home, such as the addition of a solar solution, jojo tanks or a power generator.

2.    Is your motor insurance cover up to date?

There are many aspects that affect your motor insurance, ranging from the make and model of the vehicle and who the regular driver is, through to the cost and availability of parts.   Most of us are heavily reliant on having a vehicle to get to work and run our family errands and travels.  Make sure this vital travel asset is properly covered. 

Did you know, that:

• 70% of all motor insurance claims are accident-related.
• The average claim value on a motor insurance policy is R19 000.
• Conservative industry estimates are that only 35% of vehicles on the road are insured.

3.    Pay special attention to All Risks cover

An often neglected area of insurance is that of All Risks cover.  Items that ‘travel’ with you and leave your home can represent a small fortune – jewellery, cameras, laptops, designer sunglasses, cell phones, tablets, bicycles and so on must be appropriately specified under your ‘All Risks’ section of your policy. 

Did you know, that:

• Valuation certificates on jewellery should be updated at least every two years as a rule of thumb. Insurers require valuation certificates that are dated prior to the loss or damage of an item to prove the value as well as ownership of an item of jewellery.
• Remember that household contents cover, covers just that, the contents inside your home.  Once items are taken outside of your home, they cease to be covered under contents cover and must be specified under the “All Risks” section of your policy.
• Chat to Aon about whether you qualify for worldwide “Assets All Risks” which provides cover up to 30% of your household contents sum insured for items you take away from home or whilst you are travelling.

4.    Are you renting out your property?

It is highly recommended that you contact your insurer if you are keen to capitalise on rentals from renting out your home or holiday home over the holiday season.  A good idea would be to declare the changed risk to your insurance broker. 

Did you know, that:

• Most insurance policies exclude any liability arising out of the letting and/or hiring out of any immovable or movable property, for a fee?
• A claim for the contents of your home is restricted to forcible and violent entry/exit

5.    Have you updated your asset register?

A good spring clean provides the perfect opportunity to update your home inventory if you have added new electronics, clothes, computers, jewellery and other possessions to your home. 

Did you know, that:

• An updated inventory will also help to identify items that are insured under your policy that have since been replaced or that you may not own anymore.

“It is pertinent to guard against under-insurance, as you may find yourself in a situation where you are only paid partially for a loss at claims stage.  Insurers call it the ‘average formula’ which means that if your property or household content is under-insured by 40% for example, they may only pay you 60% of your claim,” advises Mandy.

“Your home is the place that grows with you as your life and circumstances change.  That is why it is crucial to speak to a professional broker who has access to data that spans decades; who can draw on their experience in the industry to provide you with sound advice on which to build a bespoke insurance solution that will be there for you when you need it most.  Because insurance is not about the here and now, but the what if,” concludes Mandy.