Four ways to save money on your short-term insurance premiums
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With a third wave of Covid-19 and the threat of stricter lockdown regulations looming, many South Africans are revisiting their monthly budgets to cut costs.
Short-term insurance premiums may be an easy target but consolidated wealth, short-term insurance specialist Craig Mendelson, says there are ways to reduce your premiums without leaving yourself exposed.
“Before you make the decision to cancel your insurance, it’s important to weigh up how much risk you could absorb financially if something unexpected happens,” Mendelson said.
Mendelson offers tips to save on monthly insurance premiums:
1. Review your cover
Meet your insurance broker to review your cover and work through your policy schedule. A review of your portfolio may point out potential risks that you have not considered. Your broker will be able to advise on how to reduce your insurance premiums without compromising your financial security.
2. Small changes can have big savings
You will probably find that you are paying additional premiums for specified items such as jewellery, your cellphone and laptop. This made sense when you were in the office every day but if you are working from home, your risk (loss or theft) of these high-value items is drastically reduced.
You can look at removing them from your policy, selecting a limited cover option or even choosing a higher excess fee on the items, which will significantly reduce your monthly premium. It’s also a good idea to check what items are insured as you may be paying for something that you no longer own.
Your broker should be reviewing your insurance annually. Amending the retail value of your vehicles and, if need be, the sum insured of your contents and building. In addition, if you are working from home and driving less, you may qualify for a lower premium, so it is advisable to see if your insurer offers any discount should you travel less. A comprehensive car insurance product may be just what you need now.
Also, ask your broker to check if you have selected car hire included in your insurance as cancelling this will also save you money. However, this must be done only if you have access to a second vehicle, as repairs can take time.
4. Make sure you’re not underinsured
Most of us underestimate the full value of our homes and contents and “guess” the value instead of insuring for replacement value. If you guess wrong and you are underinsured, this can land you in a world of pain when you want to claim.
As an example, if your household contents are valued at R100 000 but your premium is based on R50 000, you will only be paid 50 percent of any claims you make. If you’re not sure of the replacement value of your building and home contents, it’s wise to use a professional insurance evaluator. But if your goal is to save money, park this until you can afford it.