By Nico Strydom
Insurance cover is not a case of one size fits all but rather custom-made solutions to specific circumstances.
Custom-made solutions give the consumer flexibility, says Thasnim Dawood, senior assistant ombudsman with the ombud for short-term insurance.
“As with the pieces of a Lego set, it is import to fit the correct building blocks together to obtain the cover that best suits your requirements and circumstances. It is, however, equally essential to assess whether your insurance is still working for you.”
Dawood points out that an individual’s risk cover changes all the time. “It changes when you are ready to start a family, when you are launching a new undertaking, when your children leave home, or when you are preparing for retirement. There may be times when you want to increase or decrease your cover, but what must never change is that you must sufficiently cover your valuable assets.”
Without sufficient cover one runs the risk of loss of or damage to assets, which can result in a significant financial impact. According to Dawood full cover is therefore a critical financial consideration.
“One regularly hear people saying that they have had insurance for years, but have never used it and are going to cancel it. But only a few days afterward you are involved in a car accident and have to pay for all the damage yourself.”
According to Dawood the safest option is to reassess your insurance cover rationally and regularly, for instance once a year, in response to a significant change in your lifestyle or circumstances.
“However, even if you are feeling financial stress you must still pay your premiums every month. If you miss a payment, it jeopardises your cover. If you take out cover for a few months only, cancel your policy and then take it up again a few months later when your finances are better, you only make yourself a bigger risk for underwriting and your premiums go up.”
Dawood advises consumers to reassess their insurance cover regularly rather than cancelling their insurance.
“Also look at adjustments, for instance for depreciation. When trying to lower your premium, you may take into consideration how your circumstances have changed and then adjust in terms of that.”
Ombud vir korttermynversekering: https://www.osti.co.za/