21 Apr Time to reassess your insurance cover to fit your life?
Is your insurance cover a good fit for your life right now? There are certain events or occasions in your life that make it wise to reassess your insurance cover to determine if it is still appropriate for your circumstances. Not only will you ensure that everything you care about is adequately protected, you may even be able to adjust and consolidate your policies to save you money.
Look at your short-term insurance cover
Has your life changed in any way? Have you changed jobs, bought a new car or a new house, perhaps invested in a beachfront property or new commercial premises? Have you upgraded and added value to your home by putting in solar panels, or revamping your bathrooms and kitchen, or installing a pool and outdoor entertainment area? Have property prices in your area escalated (or dropped)? Have you bought a fancy new sound system or television, or been given or inherited valuable jewellery? All of these factors could alter your insurance requirements, leaving you under-insured if you need to make a claim.
Also, if your vehicle is another year older, its value may have depreciated, so you should adjust this in terms of its insurance cover.
Insure items for an accurate replacement value
Ensure that your home and other buildings are insured so that they can be rebuilt to a similar standard in the event of a destructive fire or other disaster. Building costs may change dramatically according to various factors, so this should be reassessed regularly.
Several measures are advisable:
- Reassess the potential building replacement costs in line with the current Building Material Index. When insurers talk about the ‘building sum insured’, this refers to the estimated cost of rebuilding your home, not its market value. Your property should always be insured for the rebuild sum.
- Compile a list of the more costly household items that you would need to replace in the event that your property was damaged / destroyed. Do an online check on prices to ensure you are adequately covered.
- Does your policy include the cost of removing the remains of any damaged / destroyed buildings?
Less risk is better
All insurance policies are calculated in line with the element of risk involved. By decreasing your risk, for example by installing a security system or putting in an electric fence, you may reduce the cost of your premiums. Remember that electric fencing needs to be certified, in the same way as gas stove installations.
Do you have life insurance cover?
Ensure that you have a life insurance policy. It is important to keep your life cover updated on a regular basis, much like your short-term insurance cover. The loss of a partner can be devastating, especially if it is an unexpected death. It can also cause a financial crisis, particularly when a family relies on both partners’ incomes. Ensure that your policy will be sufficient to settle your mortgage if you have one – you don’t want your family to have to leave their home at such a time. Some life insurance policies also offer cover for immediate living expenses, funeral costs, and payment of outstanding debts owed by the deceased.
If you have income protection – what salary is it based on? If you’ve had a promotion with a salary increase, ensure that this is reflected.
Remember that some life policies change in line with your changing lifestyle and living habits. Have you recently stopped smoking? This may reduce the cost of your premium. Or have you taken up a potentially dangerous sporting activity or hobby? Keep your insurer informed!
Don’t forget to alter your will
Have you recently become engaged or married, or divorced, or remarried? Have you added to your family with the birth or adoption of a child, or have you lost a loved one who was once a beneficiary of your will? Updating your will is as important as updating your insurance, so that the people you want to inherit actually benefit from your estate!
Please note: Policy wordings and the cover offered may change through endorsements, warranties and extensions (included and optional) so it is important for clients to keep updated with their policy wording and policy schedules to ensure that they know the details of their cover.