Why short-term insurance is important

“Short-Term Insurance”, would be the word used on the street, or at a “braai” to describe a grudge payment which occurs every month. When the debit order notification is received, this would, in some cases, raise a certain annoyance. This would be the experience of many South-Africans every month, especially those who do not know exactly what they are paying for, how the policy works, who is maintaining the policy, etc.

Although this type of policy is a necessity when either purchasing a property, a vehicle or any other asset which is financed by a finance house such as a bank, this would also be seen as a necessity for those who only require cover for when something happens… Something normally happens when you least expect it, we normally least expect this kind of incidents at month-end or right after a warranty or guarantee has expired.

Short-term insurance policies are important, especially following hail, thunderstorms, floods, lightning, an accident, theft, burglary or hi-jacking. The feeling a person experiences when you walk back to your vehicle after shopping, and you find an empty parking space, or you walk into your home, and you find your home empty is overwhelming enough, imagine coming to realise that you have no insurance in place, and you will need to replace everything with your credit card. We believe that this feeling of disappointment must never be felt by anyone.

This is the reason we do what we do. Whether it is insuring a family home and vehicle, or a multinational enterprise, we provide the advice needed to ensure that our clients are placed in the same position they were in prior to the event or loss that was suffered.

We have found that in many cases there are uncertainties which is raised by the public, which relates to previous experiences where there have been claims which were repudiated, or the quality of the advice provided was not sufficient to the need of the particular client, etc. it is important to make sure of the following few points to ensure there are no delays or issues when you wish to claim and expect the policy to respond to the claim:

1. Underinsurance: Being insured sufficiently is important as the condition of average will be applied to a claim if it is found that the correct replacement value for such items was not used when the items were insured. When the policy is reviewed annually, it is suggested that the values be reviewed as well, to ensure that such values are sufficient.

2. Non-Disclosure: Many claims have been repudiated due to the correct details not being provided to the insurance company, they, therefore, did not know of certain events and the risk could not effectively be assessed. Non-disclosure would be anything from claims not being noted when accepting a policy, incorrect/invalid information being provided to the insurance company / financial adviser, or incomplete/untrue information being used to accept a policy.

3. Keeping the policy up to date: The insurance company will not know if you purchase new items for your home, or vehicle when they are not informed. This normally presents itself when a client loses a cellphone or jewelry item. It is then normally found that the items were never included in the policies’ All Risk section. It is important to always be aware of what is insured on the policy. Frequent reviews must be done to ensure that the values are correct, and the items which are on the policy is in fact supposed to be there. When items leave the house, such as laptops, cellphones, tablets, jewelry, etc. This must be insured to ensure that the insurance company will replace such items following a loss or theft.

4. Insure for the correct replacement value: Always select the correct replacement value for any item. Eg. When a property is purchased for R 1,000,000.00 this is not always the replacement value. The replacement value would include such costs for the excavator’s to remove debris after a fire, pay for the professional fees of the architect, plumber, etc who needs to draw up plans for the new structure, as well as other fees, and costs involved, and these are not included in the value which you purchase the property for. The amount which is reflected in the policy schedule must always be the amount which it will cost the insurance company to put you in the same position you were in prior to the loss.

5. Excess: Ensure that you know what the excess is on the sections of cover, this can be planned for if you are informed of what these values are. We have the necessary products in place to provide our clients with basic excess waiver options.

What you can expect from a financial adviser:

1. Personalised Service is what our financial advisers offer. We have found that our clients would prefer to speak to their adviser directly, instead of contacting a call centre and explaining their inquiry to different departments.

2. The financial adviser would be involved in the claims process.

3. When there is an inquiry or uncertainty in any respect, the financial adviser is reachable and would be able to provide clarity on whatever assistance or advice the client requires.

4. Quality of advice is something that our financial advisers take seriously. Every client would get the proper advice which they deserve, on the particular product which is presented to them, to ensure that the client is informed when entering into the agreement and the client knows exactly what to expect from the policy, and what exactly it would cover.

By Henro Visser – Short-term Customer Relations Officer