By Bertus Visser
Over the years, we tend to accumulate a lot of things, from trinkets we love to properties we renovate, with everything else in between. A garage stocked with family furniture, jewellery acquired over a lifetime, carefully curated collections or even additions to our wardrobes, all mean that over time we can build up quite a lot of items to keep safe.
Arguably, what we accumulate to leave behind to our loved ones represents our heritage, in addition to heirlooms passed down over generations. This Heritage Month, why not take the opportunity to re-look what you have built up so far and ensure what you hope to leave behind (or even just enjoy in your lifetime) is covered by your insurance. If the world we currently live in has taught us anything, it’s that we have to plan for the unexpected.
While your insurance can become more expensive when you specify items under All Risk (such as jewellery), insuring the items within your home can be relatively affordable. It will certainly cost much less to put cover in place than if you need to claim for flood damage throughout your home, but have no insurance available. It is always worth remembering that your insurer looks collectively at all your goods when considering a claim. Leaving the value of a few heirloom pieces of furniture out of your calculations (perhaps because you consider them ‘irreplaceable’), could be a costly mistake that is simply not worth the risk.
For example, paying premiums on R500 000 in cover, when you should be insured for R1 million, will mean a 50% pay-out on any claim. Contents cover is often more affordable than you might think. Rather include everything at an accurate replacement cost, or at least get a quote on the higher cover amount and asses your risk more accurately.
Contents cover is one aspect to protecting your possessions, but you also need to ensure the structure of any buildings you own. If you are still paying off your home, you might have some insurance, but it might not be enough. It’s essential that your cover extends beyond the outstanding bond balance, to also cover the costs of cleaning up a damaged home and re-building it, should a worst-case scenario happen. While the bank’s insurance is an option, it’s worthwhile considering if you can get a better deal. Your adviser will be able to help you.
Properties are often included in the heritage you leave behind. It would be terrible to pay off your home, plan to leave it to your grandchild, but then not keep insurance in place, and a devastating accident destroys the asset you have worked so hard to preserve.
Car accidents are still common, even with more of us working from home and some of us driving around less than we used to. Car insurance is perhaps the option that offers the greatest variability in terms of how your asset is covered – but it also means you need to be alert to the specifics of your cover. Your cover can be influenced by how you choose to insure your car (comprehensively, or third-party only), who the regular drivers are, and the level of excess you are willing to fund in exchange for lower premiums. Choosing to have a higher excess in place on your car insurance when you have no emergency savings can backfire if the damage to your car is less than your excess amount, as you will have no reserves to fund the repairs yourself.
Add-ons like car hire cover in case of an accident, can also be very affordable when compared to the cost and inconvenience of not having this option in place – but the cover needs to be in place before you need to claim. Cutting corners on your cover can mean it costs more in the end, so take care to always read the fine print and know what costs you will be liable for in case you need to claim. It may be worthwhile consolidating your building insurance under one policy along with your home contents and car cover, as it is often cheaper to insure all your interests with a single provider.
When it comes to passing on your financial legacy to your family, having the right insurance in place is an important first step to get right.
Bertus Visser is the Chief Executive of Distribution at PSG Insure
PERSONAL FINANCE