18 May No insurance could mean unanticipated financial consequences
Insurance ensures that you and your family will have financial security should anything unforeseen happen to your goods or property. Reducing or cutting insurance costs often results in a cover or amended terms resulting in unanticipated risks and costs should anything happen to you or your belongings.
In the last year, many people have relooked at how they are spending their money. Insurance is often the expense identified for reduction or removed and may be deemed surplus to requirements during tough economic times. During the more stringent levels of lockdown, many insurers reduced premiums to assist their customers due to decreased risks. Many insurers are still advertising that discounts and reductions are still available, but this often comes with onerous terms and conditions.
“Do not be tempted by discounted premiums. You need to know what your insurance does for you and ensure that you remain correctly covered to deal with your situation,” cautions Caron Whitfield, head of marketing and distribution at Apio Group.
“It is best to speak to your broker before you cut insurance costs or reduce cover doing this, could save yourself from uninsured losses or reduced insurance payouts,” says Whitfield.
A vehicle is a vital part of life as it gets people to work and helps them earn a living. Reducing this insurance or having onerous terms and conditions, now that South Africa is returning to work, could have a severe negative financial impact.
In addition, if the car is stolen or written off, your insurance company will replace the vehicle or pay the fair retail value. In the event of a total loss, you may also have an obligation to repay your outstanding loan balance to the vehicle financier, so having adequate cover is paramount.
“I cannot stress enough the importance of working with your broker to put together the best solution for your current financial needs without having undue risks which could be catastrophic for a family. When things get better, you can always reassess and how you can improve your insurance cover,” stresses Whitfield.