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Domestic insurance in South Africa has become a necessity. It is no
longer a privilege for only the rich and the famous.
Ask any South African citizen, and they will tell you about someone
they know who had the traumatic experience of a hijacking, a
burglary or a stolen vehicle. Worse is, poverty in South Africa does
not allow many people to afford the luxury of insurance. As a
result, many of these incidents that occur, leads to a financial
disaster for most, from which recovery is not always possible.
In short, insurance is a risk transfer mechanism which
allows compensation in respect of loss in exchange for a premium.
Therefore, it is of the utmost importance to have insurance to
protect you against losses caused by nature or by men, whether
accidentally or deliberately.
:: Personal and Domestic Insurance
::
Personal and domestic insurance provides compensation to the
individual for losses that may arise from fire, theft, collision,
wind, water, storm, lightning and hail damage.
When a policyholder enters into an agreement with an insurer, the
policyholder accepts the terms and conditions of the contract. The
policy wording stipulates the general conditions
and exclusions, while the policy schedule indicates the type of
cover requested by the insured, the excess payable in the event of
loss, the minimum requirement on which the risk is accepted and it
includes the Policyholder Protection Rules.
With the acceptance of a short term policy, the insured must receive
a copy of the policy schedule within 30 days of inception. The
policyholder must ensure that the information in the schedule is
correct and that it provides adequate cover should any claims arise.
The policyholder must also read through the policy wording so he is
aware of the exclusions of the policy. This is a safety precaution,
otherwise he will be in for a nasty surprise.
The Policyholder Protection Rules (also know as the “Statutory
Notice”), have been implemented by the Financial Advisory and
Intermediary Services Act. This document discloses information
regarding the intermediary (broker) and insurance company as well as
other legal requirements.
To have insurance, is to have peace of mind. And, as everything else
in life, peace has a price. Your monthly premium is paid in advance,
usually via debit order. Failure to meet this request timeously, may
result in the cancellation of your policy.
The various classes of insurance mainly covers the following
sections:
Householders:
What is household contents?
An easy way to demonstrate this, is to take the roof of your house
and turn it upside down. Everything that falls out, is contents.
It is important to complete an inventory in order to determine the
correct value of your contents. Always remember to work on
replacement value and include a percentage for future purchase and
inflation.
Beware! If you are not adequately insured, you will become a victim
of average. This simply means that you will not be compensated for
what your are claiming for.
Also ask your broker about optional cover for your contents of
freezer, goods in the open and clothing on the washing line. This
might not sound important, but believe me ... you will feel the hole
in your pocket when you find that you are not insured for this!
All Risk:
Remember last year when you were upset about your camera that had
been stolen and not insured? So, you learned an expensive lesson,
and now you know PRECAUTION is the word. Insure the items you
normally carry with you outside your house, i.e.. spectacles,
cellular phones, bicycles etc. under this section of your policy.
Motor vehicles, motor cycles, trailers and caravans:
If its got wheels, insure it!
Comprehensive cover:
When your vehicle is financed, it must be insured for comprehensive
cover. Main reason being that it is not yours yet, and until then,
you have to take cover of it. In a nutshell, comprehensive cover
includes the following : accident related damage, theft- or
hijacking of vehicle, windscreen or hail damage and fire.
Balance of third party, fire and theft and third party only:
If you feel it is not worth insuring your older vehicle which has
been paid off, reconsider.
Can you imagine what it will cost to replace that “old” vehicle if
it is stolen? Worse, if your 19 year old son drives into a
Mercedes-Benz and you are held liable for the damage?
Please insure it. Even if it is only for balance of third party,
fire and theft.
When insuring your vehicle, please disclose all material fact as to
the regular drivers age and claims history. Also keep in mind that
the area where the vehicle is parked at night, plays a role in the
calculation of the premium.
And, do not forget! When your vehicle is stolen, how do you prove to
the insurance company that you had an approved security device
fitted to the vehicle? Once again, PRECAUTION. Take your vehicle to
an approved fitment centre, and get that certificate.
It will save you a lot of tears.
House owners:
Mainly this includes all the fixtures to your property. Do not
forget your borehole and swimming pool machinery, and even the
tennis courts and fences.
When you insure your house, do not insure it for the market value.
Remember: when your house burns down, you must be able to rebuild it
from scratch. The replacement value is determined by building costs
and the area.
Optional cover:
Lately, most insurance companies provide optional cover which
includes car hire, waiver of excess, roadside assistance and cash
back. This is definitely a benefit, even if it will cost slightly
more. Just imagine not having transport when you have an accident or
have financial problems and not being able to afford the excess?
Conclusion:
Security villages, top of the range tracking devices, vicious watch
dogs and even old fashioned security measurements are no longer
sufficient to protect you.
It might prevent or even limit crime to a certain extent, but what
about nature? How will you safeguard yourself from a tsunami or a
hurricane Katrina? Africa may not be known as a continent where
these disasters strike, but is all part of the bigger picture.
Insurance might be an expense, but definitely an advantage in a time
of need. |
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