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Take these steps in reviewing insurance policies

When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.

According to Vera Nagtegaal, Executive Head of Hippo.co.za, it’s not uncommon for people to take out short and long-term insurance policies and not give their policies another thought. “Usually, once the paperwork is out of the way, these are completely forgotten about until something happens that needs urgent attention. But, it is incredibly important for consumers to regularly review these – especially in the event that their lifestyles and needs have changed.”

Nagtegaal says having a simple checklist, and a set of questions for your service provider that you review at least once a year will help you understand which policies need your attention.

Household insurance

Moving homes or buying large household items shouldn’t be the only reason you review your household insurance cover. Think about the following:

 

·         Have you bought new appliances and notified your insurer? If not, now’s a good time to do that. Look at what your policy will and won’t cover – and if there are special clauses for specific items.

·         You can draw up an insurance checklist and compare what you’ve insured with what still needs to be insured. A spreadsheet can help you organise your list.

·         Perhaps you’ve downscaled on your home size and your possessions. Go over your policy and make sure you’re not over-insured.

·         If you’ve changed the structure of your home in any way, declare this to your insurer. Alterations will affect how your risk is measured, the value of your property and so on.

Motor vehicle insurance



·         When it comes to reviewing your motor vehicle insurance, you should look to see if the information you supplied a year ago still applies.

·         “If you’ve made modifications to the body of the vehicle, outside of repairs, you need to declare this,” Nagtegaal points out.

·         Look at the extras offered by your insurer. Perhaps you’ve bought another car and don’t need to pay extra for car hire or a courtesy car. Review these extra features and take out what you don’t need.

·         Have you started a side-hustle during the year that relies on car use? Then you need to let your insurer know as not disclosing this could have an adverse impact should you submit a claim.

Life, disability and funeral cover

“Review your life, disability, and funeral cover to ensure you’re still appropriately covered,” explains Nagtegaal.

·         Understand the different types of cover and how the policy works. There are several questions you should ask: under what conditions will my cover pay out and how (e.g. lump sum or monthly for life cover)? Are there any exclusions? If so, what are they and how do they affect you or your family?

·         In terms of the actual insurance payout, what factors influence the value of my payout and does the amount I’m insured for grow? Can I change it if I realise I’m under-insured?

·         If the state of your physical or mental health changed in the past year, notify your insurer to find out if this may have any impact on your cover. Don’t hide this - your insurance could refuse to pay out if you’re not honest.

·         Think about the amount of debt you have and how much you’ll need to pay it off in the event of your death.

Nagtegaal explains that it is important to spend time reviewing your policies. “If you are not familiar with the technical details of the various types of cover you may have, as well as whether or not you are getting the most out of these, it is recommended that you speak to an advisor who will be able to guide you through the process of evaluating your policies. A professional will help you determine your needs adequately and help you cover blind spots you may not have considered.”

“It is also equally important that policyholders are aware if the cost and benefits of any policies have changed. While it may not always be necessary to swap providers, it is incredibly important for consumers to compare what they are getting against what other providers may be offering,” Nagtegaal explains.


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