Save money and avoid nasty surprises: Five reasons to review your insurance policy

With the advent of Covid-19, many of us have been through more life changes than usual. 

You may have changed jobs, started a new business, had your parents move in with you, or sold your car because you are now working from home.

Limited spending on travel and entertainment during lockdowns may have resulted in expenditure in other areas such as home renovations, new appliances or investments in art and luxury goods. 

Any of these events can trigger a change in your insurance requirements, which is why it’s important to evaluate your policies regularly.

Reviewing your policies every year helps you to assess whether your insurance needs have changed, and whether you need to streamline your policies. This can save you money by reducing your premiums, consolidating policies, or filling gaps in areas that need additional coverage.

“Start by looking back at the previous year and think about events that have transpired so you can align your insurance requirements. This will help mitigate the risk of being over or underinsured and will help you avoid any nasty surprises in the year ahead,” says Hardy Ncube, head of personal products at Standard Bank Insurance.

To ensure that nothing slips under the radar, and that you aren’t paying for something you don’t need, Ncube highlights five factors that may affect your insurance needs and thus should be considered when evaluating your policies:

1. Life events require policy updates

The birth or adoption of a child, inheritance of heirlooms, changing jobs, moving homes, starting a business, or buying and selling assets are some of the factors that will shift insurance requirements. Depending on the circumstances, these events could increase or decrease your insurance needs.

Assets such as jewellery and electronics that have been recently acquired should be correctly specified when updating your insurance policy. Additionally, those who have moved homes should update their addresses with their insurers.

2. Wear and tear could affect your premiums 

Make sure your assets are insured at the right replacement value and not the original purchase price. Cars, furniture and electronics are all assets that usually lose value over time, but the replacement value could also increase due to fluctuating exchange rates and shortage of goods.

Doing regular valuations and policy reviews on these items will help to make sure you are correctly covered at the replacement cost, which may be higher or lower than the original purchase price.

3. Home improvements could leave you underinsured 

Any home improvements and renovations may enhance the value of your home. As such, policies need to be adjusted to reflect higher values.

Your policy should also correctly account for the contents of your home and any valuable items you may have acquired after your last policy update. If this is not done correctly, it could leave you underinsured and a payout from a claim may not cover or replace the full value of the assets.

4. Less risk means more savings 

All insurance policies are priced by calculating the risk factors involved. Ultimately, decreasing your risk will decrease your insurance premiums. For example, a security system may decrease some of your home’s risk factors and thus your insurance premiums.

5. Take lifestyle shifts into account 

The shift to hybrid and remote working has resulted in fewer people travelling between home and work every day. This means that monies saved from paying less on car and home insurance can be used in other areas such as increasing your monthly bond repayments or emergencies savings. 

“Standard Bank Insurance Brokers has a team of experts who can advise you on all your short-term insurance requirements. There are various options of cover available, all of which are subject to the terms and conditions of the insurer and based on the client’s individual profile. Through our innovative offerings, we can meet your coverage needs, while helping you save on premiums where possible,” says Ncube. 

This article was paid for by Standard Bank.