How to spring clean your insurance policy

The economic shocks triggered by rising inflation, supply disruption, loadshedding, and extreme weather conditions like severe flooding and fire, have had a significant impact on the insurance experience of consumers. With spring in the air, it is crucial for customers to go through their insurance policies to make sure they are adequately covered.

“Unprecedented events have resulted in trends being bucked, which means that many consumers are finding that they are not adequately insured for claim events. Unfortunately, this is being discovered when it is too late, at claim stage,” says Lizo Mnguni, spokesperson for Old Mutual Insure.

One event that has left policyholders either out of pocket or without benefits, includes an increase in vehicle values, driven by new vehicle shortages, parts shortages, computer chip issues, and shipping issues. This means that policyholders may find that they are underinsured, this may cause problems if an insurance claim is lodged.

“It is now even more important to review existing policies, keep appropriate insurance covers in place, or adjust cover where necessary,” says Mnguni, adding that Spring is an opportune time for households to review their basket of non-life insurance cover.

How to spring clean your insurance

Below are Mnguni’s top tips on how to “Spring clean” your insurance policy.

Review your existing insurance policy

“Reviewing your insurance policy is one of the ways to fight the rising inflation cycle, as it means you are empowered to understand inclusions, exclusions, claim processes, excesses, and how premiums work,” says Mnguni.
He says that the onus rests with the policyholder to make sure they are insured for the right amount.

“Although your non-life insurance policy is automatically renewed annually, it is essential to confirm that you are insured for the right amount. This is because when your insurer calculates your premium, it’s based on several underlying factors, including market trends and movements, that influence the cost of insurance.”

If you have made changes to your home or contents, update your cover

Mnguni advises that it is important to update your insurer about any major changes to your life – such as home renovations or builds, additions of inverters or solar power to avoid loadshedding – to avoid any disappointments when an incident occurs that requires you to claim.

In addition, carefully and regularly updating your household inventory could provide an opportunity to update your coverage and risk requirements. This is because home contents value increases as the years go by and could now cost twice or three times as much to replace.
“The cost of building a home has risen by11% over the last 12 months, which means that sums insured also need to be lifted,” says Mnguni.

Make sure your vehicle is insured correctly.

If your vehicle value does not accurately reflect the correct vehicle value available in the market, you may need to consider top up products, which would allow the insured value of a vehicle in the event of a total loss or theft to be accurate. This will allow you to not be out of pocket when you claim.

In addition, given that motor vehicle repairs are taking longer, it is important to expect delays. Car rental benefits are common in many motor insurance policies to cover transportation while a vehicle is in for repair. As a result of extended vehicle repair cycle times, it may be a good idea to increase care hire benefits on policies from 30 to 90 days in lieu of parts supply cycle delays.

Speak to your broker or insurer

Mnguni says some insurers are responding to these extraordinary times by providing innovative solutions.
“As part of your ‘annual Spring clean’ on your insurance policy, discuss some of the issues in the market with your broker, who can help you ensure adequate coverage,” concludes Mnguni.