South Africans faced tough economic times in 2023 as they struggled to make ends meet while still having to manage increases in the cost of living.
Many consumers may have received notices at the end of 2023 or the beginning of 2024 of their insurance premiums increasing. The hike in insurance premiums coupled with the high cost of living may have people thinking about cancelling their insurance.
Cancelling your insurance is not the solution. Instead, consumers should review their insurance to take into account lifestyle changes like downsizing their property or making the switch to work from home.
Karen Rimmer, head of Distribution at PSG Insure said: “Part of developing good financial hygiene involves making a habit out of reviewing your insurance needs at the onset of each year.”
Here are three aspects you should consider:
Car insurance
According to Keletso Mpisane, head of MiWay Blink, it is advisable that people review their car insurance policies to make sure that it meets all of their requirements.
Mpisane said that understanding how premiums are calculated helps in this process.
“Some prefer to pay a lower monthly premium and opt for a higher excess to be paid in the event of a claim, while others don’t want to fork out a large excess amount when they need to claim and rather prefer to pay a higher premium every month,” Mpisane said.
If a person has made the change to start working from home instead of working out of an office then they should check with their insurer to see if they will be rewarded for cutting down the amount of time that they spend on the roads.
People should also check that their car insurance policy meets the industry standards.
Life insurance
Edwin Theron, CEO at Sanlam Indie said that life insurance coverage is an essential part of any financial plan that should be updated to take account of new events or changes in your life. These events could be getting married, buying a house or having a baby and even getting a divorce.
Although your life insurance policy will renew routinely, people should ensure that their policy covers their current demands.
Other things that people should do is to ensure that their beneficiaries details are up to date to avoid delays in the event of a life insurance claim. Check your policy to see if you have adequate insurance cover for a range of circumstances, such as death, disability, and chronic illness.
Home insurance
Wynand van Vuuren, the client experience partner at King Price Insurance, said that it is vital that people insure their home contents for their replacement value and not what they paid for the items.
“Also, make sure that you’ve specified any high-value items that you take outside the house under your portable possessions cover, or they’re effectively uninsured,” van Vuuren said.
Portable possessions can include: your phone, laptop, jewellery, watches sunglasses and clothing.
If you have bought a new TV or laptop, make sure that they are included in your home insurance policy.
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