File Image: IOL
File Image: IOL

Insurance: Finding value is easier than you think

By Opinion Time of article published Sep 25, 2020

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By Bertus Visser

While short-term insurance may be a grudge purchase for some, there could be hidden value in your personal or commercial policy. At a time when every rand counts, it is important to be aware of the more common Value Added Products (VAPs), that you may already have included in your cover, or that you could easily add, cost-effectively. Anything that helps make life easier, or less expensive, adds value to the journey. Here are some VAPs to keep in mind.

Vehicle VAPs

While many of us are quick to opt for a higher excess in exchange for lower monthly premiums, you should be sure about the exact costs you will be liable for, if you need to claim. Keep in mind that some insurers calculate the excess as a percentage of the claim amount. If the claim value is R300 000 as an example, an excess of 5% of the claim would mean R15 000 will need to be paid upfront.

You can put VAPs in place that reimburse your basic, theft and hijacking excess in the event of a claim, provided the vehicle is comprehensively covered. Any additional excesses will still apply, and the cover will follow the frequency you’ve selected for your policy to be in force (e.g. monthly or per annum).

VAPs for tyres could provide cover for loss or damage from hard breaks, bursts and for repair or replacement of a tyre, including valves and balancing, depending on your cover. With windscreen replacement costs increasing and therefore the excess applicable to a claim, there is a VAP that allows you to buy back your windscreen excess too. This type of cover typically offers maximum liability and two claims per vehicle, per year.

Just in case

We take the convenience of having a car for granted, but an accident can mean your car is kept at the repair shop for weeks. While you might consider asking friends for lifts, using ride apps like Uber or even using public transport, making alternative arrangements can become cumbersome, especially if you have a family to transport. Even if you have two cars in your family, having car hire can be beneficial, as the second car might not be available when you need it.

If you have an imported car, parts can take a while to arrive, so standard car hire may need an extension, depending on what car you drive.

Going the extra mile for safety

Our roads aren’t always hazard free, and bumps and scratches can be common irritations that need not cost as much as you think to repair. Maintenance VAPs are available for restoring paintwork damage due to general wear and tear. Emergency assistance such as for roadside incidents like a breakdown might also be included in your policy, along with ‘safely-home’ options that you can book in advance through your insurer, to avoid driving after drinking. You could have up to six trips included in your policy.

Household assistance and maintenance may also be included, which would be useful if you need a locksmith, or your geyser bursts, or you have other home emergencies.

Cover against crime and injury can be included too

Trauma cover within terms and conditions, medical benefits and legal assistance can be included in your policy as well, which may extend to covering any fraudulent issues against your personal identity. This could prove useful in the current climate where cybercrime risks and financial fraud are rife.

You can also opt for a premium waiver VAP, which provides cover for death, permanent disability, and retrenchment.

You might also consider how you would feel if your domestic employee became injured on the job (imagine a fall down the stairs, as an example). Specific domestic employee cover can be added too.

Are you properly covered?

Insurance can help us solve shortfalls, but sometimes opting for lower premiums means we forgo benefits that could mean much more in the long run. You should always be clear what risks you are opting into when agreeing to fund part of the costs yourself. Knowing about or adding on solutions to your policy, can make for a better experience. Knowledge is power, and preparation is never a waste. Be sure to add VAPs to the discussion list with your adviser to ensure your policy gives you the protection you need.

Bertus Visser is the Chief Executive of Distribution at PSG Insure

PERSONAL FINANCE

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