6 steps to keep your insurance and financial wellbeing on track
Economic pressures impacts us all and we need to plan ahead and budget accordingly. Insurance policies need to be kept up to date as part of managing expenses.
Any item you bought this time last year - be it a new household appliance or professional equipment - is likely to cost more today. So, having insured it at last year's buying price, you won't be able to replace it at today's cost if it is damaged or stolen and you are solely reliant on your insurance claim.
This is according to Bertus Visser, Chief Executive of Distribution, PSG Insure, who says that reducing your cover or cancelling your policy to improve cash flow may seem cost effective, but not if you need to claim. A large loss without insurance cover could be detrimental to your financial future and truly prevent you from managing economic knocks.
Visser offers 6 steps to follow to keep your insurance and future financial wellbeing on track:
1. Don't discover you have too little cover too late
You may think that simply having insurance offers you enough protection. The reality is that your level of cover might be insufficient - and when misfortune strikes, there is little worse than submitting a claim only to find that you aren't fully covered. Be sure to consider all relevant risks, and to allocate the necessary budget to adequately cover your home, vehicle and personal contents.
2. Keep it business as usual
If you own a business, consider more than the overall replacement value of your property, buildings, equipment and average level of stock. Factor in expenses such as escalating building costs (on average higher than standard inflation), rising replacement costs of imported stock, peak period stock levels (when you might need to adjust your cover) and the costs of rubble removal if your premises is damaged by fire or floods.
3. Keep your personal cover current
Changed jobs or recently purchased something special? While your insurance cover is unlikely to be the first thing you think of, it's critical that you inform your advisor as soon as possible on any significant changes in your circumstances, such as where your vehicle will be during the day or specifying an expensive item.
4. Don't underestimate the cost of claims
Any item you bought this time last year - be it a new household appliance or professional equipment - is likely to cost more today. So, having insured it at last year's buying price, you won't be able to replace it at today's cost if it is damaged or stolen and you are solely reliant on your insurance claim. This makes regular, thorough policy updates critical.
5. Realise the rand reality
Take a look around your house, or your business. How many items are imported? At home it might be your flat-screen TV, laptop or expensive fittings. At your business it might be trading stock, specialised machinery or even cleaning equipment. Consider all items that could cost more to replace if they have to be bought using a weaker rand, and account for the differences in their insured values and realistic replacement costs.
6. Remember your responsibilities
You have an obligation to your advisor to provide correct information for your insurance cover. Disclose all relevant details and make sure you provide accurate estimations of value. If you are not confident to verify this information, many insurers can assist by sending appraisers to value your insurable property or goods.
Your advisor will review your policy annually to make sure it is still accurate and complete. However, you need to be sure you provide any updates and account for the impact of the economy. By doing so and working with your advisor, you can rest assured that your personal and business interests are well protected.
Author: Property 24