07 February 2017: It is important to conduct an insurance policy review every year and with 2017 well underway, now is the best time. This, according to Annelie Smith, Corporate Executive at RBS, who states that many policyholders are unaware that they are underinsured.
“Consumers need to make sure that their policies are updated and that they are still getting value from it. They also need to be aware of any policy changes, make sure they add any new requirements to their policies and that they still understand their responsibilities in terms of managing risks outlined in their policies,” Smith notes.
She says the cover that changes the most throughout the year is the home contents policy. “In terms of home contents, consumers need to know the limit of their cover, and make sure it still covers the replacement values of their possessions. You need to take into account the value of any new electronics, kitchen appliances or art items that you may have bought throughout the year. You should also keep up to date valuations of jewellery,” she adds.
According to Smith, the wardrobe is one of the main causes of underinsurance of home contents. “The vast majority of policyholders are far off in their estimates when it comes to the cost of their clothes and shoes. Most people think the replacement value of their wardrobe after a catastrophic event, is around R10 000 when in fact it is probably closer to a R100 000 or more depending on the size of the family.”
“This is also the time policyholders should look at the excesses stipulated in all of their policies. When reviewing their budgets for the year, policyholders should calculate whether they would be able to pay the excess in case of an unexpected loss. In some cases it may be more sensible to pay a slightly higher premium in order to qualify for a lower excess. This potentially places much less strain on the policyholder when they suddenly need to claim,” says Smith.
For vehicle policies, it is vital to make sure that car and driver’s licenses are up to date, and that the relevant family members are listed as regular drivers on vehicle policies, she says. “It is also important to familiarise yourself with the terms and exclusions in your policy. Find out if there are any new provisions or changes that the insurer may have announced. Consumers need to be aware, for example, that most insurance policies do not cover losses as a result of car jamming.”
“Also many vehicle owners are still unaware that a regular code B license only allows a road user to tow light luggage trailers with a total weight of less than 750kg, and that in order to tow a heavier trailer, caravan or boat, requires a code EB license. Consumers should therefore make sure that they have the correct license matching their trailer, otherwise an insurer can deny a claim after an accident,” she adds.
Lastly, Smith states that consumers need to take this time to schedule maintenance on their homes. “Insurers are within their rights to deny claims that have arisen from a lack of maintenance. Issues like faulty geysers, damaged water pipes or damaged electrical wiring could result in massive damages. Should the insurer find that the loss could have been avoided if the owner had maintained his property, the claim could be repudiated.”
About Risk Benefit Solutions (RBS)
With over 20 years’ experience, RBS is one of South Africa’s largest independent insurance and risk specialists. The company has the expertise to deliver tailored and trusted insurance and risk services to its corporate and individual clients across Africa. RBS is able to do this through its team of trusted and experienced specialist brokers, formation of unique partnerships with insurers, as well as its innovative products, customised to meet the individual needs of its clients, who all receive personalised service from RBS’ senior consultants. Visit www.rbs.co.za for more information.