SCOTTFIN NEWSFLASH

SOME BASIC INSURANCE TIPS

Your short term insurance policy should not sound foreign, and the best interpreter to assist you in understanding will not cost you an arm and a leg… MAKE USE OF A BROKER.

The Broker will advise you on matters of insurance, and will act on your behalf in negotiation and guidance of the purchase of insurance cover.

What are the specific services that insurance brokers usually offer? The Broker will conduct an analysis of your insurance needs. Based on this analysis, the Broker will secure quotations on appropriate insurance products for you, and will explain the details of each product.

The Broker will also render Claims assistance and help you through the Claims process from the start to finalization of the claim.

Each year at renewal of your portfolio, the Broker will review your current insurance portfolio and the Insurer’s renewal terms and will advise you of any changes to cover and premiums.

Insurance is based on utmost good faith. Premiums are based on the risk information supplied to the insurer. Always disclose honestly.

Not a good idea to inflate or (even slightly) increase the value of your claim, as your whole claim may be rejected.

Saving Cents doesn't make Sense

Following recent claims where clients are finding themselves more and more underinsured in certain classes of insurance, we thought it imperative to highlight the sharp depreciation of the Rand against the US dollar and Euro over the last three months and its impact on the adequacy of current sum insureds.

As you well know, our currency has weakened substantially in recent months and the difference between insured value and replacement value has now increased.

Items such as jewelry and imported electronics will almost certainly need to have their sums insured re-evaluated and increased.

Under insurance could be described as the occurrence when there is a shortfall between the amount of cover selected and the actual replacement value of what is being insured. The result is that you will only be paid a proportional part of your claim. In the event of a claim, the principle of ‘average’ (and no we are not talking here about the English cricketers average performance over the past few weeks) would then be applied.

Average is an insurance principle which has frustrated many insured clients - yet it is a simple and easy one to understand. If an item or property is underinsured, the insured must bear a rate able proportion of each and every loss. Technically, you become your own insurer for the balance of the loss.

For example, let’s say you insured your household contents for R80 000 and your house is broken into. Goods with a replacement value of R30 000 are stolen which you claim under your Home Contents policy. Following assessment, it is found that the current replacement value of your total Household Goods before the theft was actually R100 000 and not R80 000 as insured. This means that you were underinsured by 20% and Insurers will pay only 80% of your claim, i.e. R24 000 and not the R30 000 claimed.

What is the replacement value of goods?
The replacement value of goods is what it would cost you, at the time of a claim, to replace all your belongings with similar brand new ones.

Changes of information and/or circumstance could affect your cover and your premium, so you should inform your insurer of them immediately. Some examples are moving to a new residence, changing the regular driver of your insured motor vehicle, convictions for offences relating to dishonesty (against you or someone covered under your policy) and getting tenants to rent your property.

An excess (also known as a deductible or first amount payable) is charged to minimise the number of small administratively expensive claims, or to reduce a loss ratio, and to impose a duty of care on the insured. Excesses are usually charged either as a percentage of the claim, or as a fixed amount.

Letting your children drive your car without telling your insurer that they are regular drivers may result in a rejection of your claim.

Planning to celebrate your coming of age? Don’t drink & drive. Drunk driving will result in a claim being rejected.

It is important to keep proof of purchase for valuables. Your insurer may want proof when you claim.

It is advisable to have jewelry valued by a reputable jeweler and supply a copy of the valuation certificates to your insurer. In most cases, this is a requirement of cover. In the event of a claim, replacement of such jewelry will be hassle free as Insurers will have exact description of the items.

Doing renovations to your house? Poor design and faulty workmanship may result in it not being covered by the insurer. Also important to check with the building contractor that they have adequate Contractors All Risk Cover in place.

Test the tracking device on your vehicle on a regular basis.

Don’t become a victim of smash & grab. Ensure that valuables in your vehicle are not visible by others.

In the event of a claim, notify your Broker within 30 days from date of occurrence.

Insurers reserve the right to repair; replace or make cash settlements in the event of a claim.

Should you require more information on how your short term insurance portfolio can be tailor made to suit your needs, we kindly invite you to contact Marius Marais or Dillan Drew at the Scottfin Scottburgh office.