By: Karen Rimmer
The start of a new year often brings changes in routines, fresh opportunities, and – if you’re lucky – new prized possessions acquired during the festive season. While many focus on resolutions for the year ahead, it’s equally important to consider what has changed in your life that could impact your insurance.
It is important to ensure your insurance policy reflects your current circumstances to avoid potential issues down the line. Although not all annual reviews happen in January, it’s a good time to assess your cover to account for any changes. For instance, if you’ve acquired new valuables, changed vehicles, or have a child who will now be driving your car to university; these are important updates that your insurer needs to know about.
Why update?
Short-term insurance policies are rated according to specific risk profiles and factors, such as who regularly drives a vehicle or where it is parked. Failing to update these details with your insurer can leave you uninsured or lacking adequate coverage. It's essential to update your policy to reflect any changes in circumstances. For example, a car parked at a university dormitory instead of at home represents a different risk. Similarly, neglecting to specify new regular drivers can lead to complications when filing a claim.
Updating your policy does not eliminate the need for an annual review. While you can and should make changes to your policy as and when your circumstances or assets change, these updates don’t replace your annual review. Think of the review as your policy’s anniversary, regardless of any updates made along the way.
Three key benefits of keeping your short-term policy up to date:
1. Reduce the likelihood of unexpected expenses
Many South Africans are underinsured due to economic pressures and rising inflation. This leads to gaps in cover, especially in property and personal insurance, where values tend to lag current replacement costs.
Underinsurance can leave you exposed to unexpected, out-of-pocket expenses and claims that result in disputes or partial payouts, as insurers only compensate for the proportional value of the coverage. An adviser can easily ensure your policies keep up with your circumstances.
2. Save on premiums
Over-insurance is less commonly reported but occurs when neglecting to adjust cover for depreciating assets like vehicles. You’re paying higher premiums for more cover than you need, and a review can highlight potential savings and redirect those funds to other priorities.
3. Ensure a smooth claims process
Regular updates allow your adviser to make sure you’re still compliant with insurer requirements, to avoid disputes during claims. Many of these disputes come down to inaccurate or outdated policyholder information and because of that, 70% of insurance disputes are resolved in favour of the insurer.
Don’t wait
While the new year may bring a new start for some, you can update your insurance policy any time of the year. You can reassess your insurance at any time but don’t wait until the claim stage to update sums insured for new purchases or lifestyle changes. A quick and easy policy update with a trusted PSG Insure adviser can go a long way towards protecting you for the year ahead.
* Rimmer is the head of distribution at PSG Insure.
PERSONAL FINANCE