Let’s be specific about specified and unspecified insurance

Insurance is not a ‘one-size-fits-all’ solution, it is not a product that you can ‘take off the shelf’. Every person is unique – we have individual needs and that is why we have different possessions that fits our lifestyles. Same applies to your insurance policy – it has to be tailor-made so that all your possessions are covered in the event of loss or damage.

“Choosing to not commit to insurance premiums on items you might not lose or might not damage, can hurt. Believe me that when such items are indeed lost or stolen, the pain of that financial loss is much bigger.” says Lize Badenhorst, iMas Insurance Brokers GM: Short Term Insurance. iMas Insurance Brokers is an authorised Financial Services Provider (FSP 47563) and a wholly owned subsidiary of iMasFinance Co-operative Limited.

Lize answers a few questions on how you can protect your assets by fully understanding the difference between specified and unspecified insurance:

1. What is specified and unspecified insurance?

Specified insured items are mostly items that you carry with or on you – usually higher in value, and as per the requirement of the insurer, examples include: sporting equipment, bicycles, cellphones, electronic equipment, jewelry, and caravan contents.

Unspecified insurance falls under all-risk cover (also cover for personal possessions you carry with you in person) but with a lower value – usually below the value of R1 500 per single item. Here you choose a collective value to account for all your possessions that are less than R1 500 in value per single item.

2. Why is it important to specify certain items in your insurance policy?

This cover insures items that are not always kept in your home when it gets damaged, stolen or lost. You enjoy the peace of mind of having all your items covered. You pay a specific premium for it, and it is usually higher value items you take with you (i.e. laptop, jewelry, bicycle, etc.).

3. What are the implications of not specifying certain items in your policy?

You may not enjoy the benefits of the cover. So, if your items are stolen, damaged or lost you will not be able to claim as you did not specify these items.

4. Why is it so important to update your insurance policy on an annual basis?

It is common for clients to purchase new personal possessions (such as jewelry, cellphones and laptops etc.) and forget to add these items to their policy. If it is not insured for the current replacement value, then the claim may not be paid in full and will lead to financial loss.

5. Is it costly to specify certain items in your insurance policy and how does the cost of insuring specific items compare to the risk involved of not specifying certain items in your policy?

The cost of insuring specified items is far better than realising that all your valuables are not insured. For example, insuring a ring valued at R31 000 can cost about R 95 per month. If that ring is lost/stolen, the R95 is not a big expense knowing you will get the value back.

6. Please provide a real-life example where a client did not specify certain items in their policy and what the unfortunate consequences were.

We had an incident where a client’s crossbow was not specified but stolen and worth almost R20 000. This claim was not paid out and the member suffered a financial loss. Due to the big loss, they could not replace their crossbow and had to start saving from scratch for a new one.