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The Wealth Room

Description

Why do I need insurance?

We all face some sort of risk on a daily basis. The risk increases dramatically when you live in a country like South Africa. What is a risk? It is that unforeseen event, the unpredictability of factors that can result in a gain or loss. The risks we want to avoid is the risks that can cause a financial loss. That is why insurance is so important to protect ourselves against unforeseen and unpredictable events such as accidents, fire, theft and so much more. Insurance protects you against a financial setback and helps recover you into the position you were before the event.

Why do I have to pay an excess?

Most policies contain excesses, which is designed to eliminate small losses. Policy excess compels you to share in the financial loss. It also helps in keeping your premiums as low as possible. You can increase your premiums and therefore lower your excess or vice versa.

What are the consequences of over and under insurance?

When underinsured, a claim is limited to the insured amount shown on the policy schedule and not the actual replacement value of the item. When overinsured, you pay an unnecessary high premium, as payment for a claim will be limited to the replacement value of an item and not the insured amount.

Am I covered for a thermostat or the element of my geyser?

No, only a burst geyser will be covered. However, Santam now has an option to add these breakages for an extra premium. This will be covered under geyser maintenance.

Am I covered for a leaking roof?

The leak itself will only be covered if the cause was due to a specific event like storm/wind damage. Any damages caused over a period of time or due to a lack of maintenance (broken or missing tiles, waterproofing, etc.) is not covered. The resulting water damage will be covered even if the leak itself is not covered.

Will my cell phone or laptop be covered if not specified?

Under the household section, you will have cover for certain events, but only if the loss occurred at home. All electronic devices, however, need to be specified in order to enjoy cover away from home. These items can’t be claimed under the General Unspecified all risks.

Will I be covered for a power surge?

Most insurers will have limited cover and the option to extend. Please make sure what is included in your specific policy.

Can I claim for items stolen out of my vehicle?

Yes, if the policy includes unspecified and/or specified items, but only if access to the vehicle was gained by a forcible and visible entry. The items in the vehicle, however, need to be concealed as all insurance policies have a general clause which states that all reasonable care was taken to avoid a claim. No cover for unlocked vehicles or items left in the open.

In the case of an accident/breakdown, can I use any towing company?

No, you have to call your insurer’s call centre and they will arrange towing/assistance. If not, you could be liable for the cost.

How do I know what is covered under my insurance policy and what is not?

You will receive a policy contract when you start with your cover. This will explain what is covered under each section and what is not. It is also recommended to contact your broker to advise on possible claims.

Why is it best to have a professional broker assist me?

A broker will analyse your risk exposures, and highlight both the insured and uninsured risks. The result? You can purchase insurance with total peace of mind. The broker will also provide ongoing advice, make policy amendments, and submit and finalise claims on your behalf. Brokers deal with various insurers, so they can compare prices and offer you the best possible insurance solution for your needs.

Do I pay a broker’s fee?

The cost for a broker is free! Contrary to statements by direct insurers, there is no extra cost to have a broker. In fact, the insurers normally provide cheaper insurance premiums for brokers. The reason for this is the volume of business placed by brokers. The broker’s commission is included in insurance premiums, whether you make use of a broker or not.

Details

Short-term insurance FAQs

Date

October 17, 2017

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