Personal Insurance: Spring clean your insurance: our top tips

3 min read 23 January 2019

Did you recently get married?  Move in with your partner?  Or maybe you made some adjustments to your property.  Every year, our lives change and every new year we ‘spring clean’ the clutter to make way for the new resolutions.  But more often than not there is one thing we always put on the back-burner.  The dreaded, yet all-important, insurance contract.

Your contract with your short-term insurer is automatically renewed, but for most consumers it simply ‘ticks over’ without having scrutinised it to check that you’re neither over-or under-insured.  This is all well and good, until disaster strikes.

The ombudsman for short-term insurance, Deanne Woods, repeatedly encourages consumers to review their insurance policies every year. At Santam, we recommend ‘spring cleaning’ your insurance policy may even help you save some money in the long run.

Marius Neethling, Personal Lines Underwriting Manager at Santam gives the below four tips on how you can ‘spring clean’ your insurance policy to help you save some money in the long run.

  1. Adjust the amount you’re insured for: The main reason for reviewing your policy is to make sure that you are insured for the right amount – this is what insurers call the ‘sum insured or limit of indemnity’. Over the course of the past year, you may have bought a brand new bicycle and a couple of other items, all of which means you will have needed to adjust the contents of your home insurance cover.
  1. Underinsurance: This may sound obvious, but, with the exception of motor insurance (see below), the value of the goods insured should equal what it would cost to replace them today, not the original purchase price. Very often we find that goods remain insured for their original value – for example, a leather couch bought 10 years ago would be insured for R6 000. But to replace the couch would cost R20 000 today, so you could be left very disappointed when you leave the shop with an inferior and smaller couch than the one it replaced. For this reason, insurance companies usually automatically adjust your sum insured each year so that the covered amount keeps pace with inflation, and this should be made clear in your policy document.
  1. The structure of your home: If you’ve enhanced the value of your home by replacing your roof, redoing your kitchen or improved your home by installing a swimming pool, you need to increase the amount your house is insured for too. Your house (its structure) and your belongings (the contents of your home) must be insured at their replacement value – that is, what it will cost you, at the time of a claim, to replace/rebuild the building (your home) or belongings with similar, new structures or items.
  1. Your car: Your car should be insured at a ‘reasonable market value’. Reasonable market value is the retail value, which is what a dealer would sell it for, considering its age, the mileage, the condition of the car and any extras. If you’re wondering what your car is worth, you are requested to contact your broker or Santam directly (should you not have a broker) to work out the reasonable market value of your car with a car calculator provided by Santam.

Neethling concludes, “It is important to ensure that you update your insurer about any major changes for many reasons to avoid any disappointments when an incident that requires you to claim from your insurer occurs. Help us help you by ensuring that you are adequately insured for your household contents and vehicle.”