Secure your child's assets while at varsity

As the academic year get gets into full swing, many parents are now facing the tremendous costs that come with sending their child to varsity. Besides the tuition fees, there’s the realization that all the electronic gadgets, text books, clothes, cameras

“The likes of iPods, Kindles, tablets, iPads, sound systems and laptops are very much part of a student’s ‘inventory’ today, so it’s advisable to check that covers in this respect are in place,” explains Mandy Barrett of insurance brokers, Aon South Africa.

“There is a misconception that items such as laptops as well as the contents of students’ rooms are uninsurable because this is regarded by insurers as a ‘communal area’, and therefore these items are considered high risk. While this may be true in some cases, some insurers can arrange cover for these risks. These items are linked to household contents cover or vehicle cover, subject to the fact that cover will always be subject to certain insurer restrictions like forcible and violent entry.

“Essentially, this means that expensive items such as laptops, sound systems, ipods, sporting goods and so on can be insured,” explains Mandy.

It’s therefore important to review and understand the cover under the Household Contents and ‘All-Risks’ sections of your policy. “This would avoid a situation where, for example, an expensive laptop is damaged or a pricey cellphone disappears from the back of a student’s vehicle, and the item is not covered. Also, avoid the pitfall where the value of an item specified in the policy is not listed at its replacement value or you could find the insurer only partially pays out in the event of a claim on the basis that the item was under-insured.

“Correct valuation is all to do with what is described as the ‘wealth effect’ which is driving up the replacement values of possessions of all kinds. “When it comes to replacing lost, stolen or damaged students’ valuables you may find that their costs have outstripped your buying power, forcing you to compromise on the replacement item. For example, replacing a laptop would almost certainly involve an upgrade and the chances are it will cost more than the original.

Another important area that demands attention is that of insuring a student’s motor car. Parents should be aware that statistics confirm that younger, inexperienced drivers have a much higher accident rate and hence more claims, than older, more experienced drivers. And research also shows that while female drivers tend to have more accidents, they tend to be much smaller claims than their male counterparts, where the average cost of repairs is around R17000. Stats also show that young drivers/students have a 2.5% chance of having an accident within three months of receiving their car. Further food for thought when considering a vehicle for a young driver is that an expensive vehicle (sum insured greater than R250 000) has a much higher probability of being involved in an accident than a less expensive vehicle.

“In terms of some sound vehicle purchasing advice, it’s particularly important that parents consider a student vehicle with modest power, excellent safety features and that’s roadworthy. Besides the insurance implications of putting your child behind the wheel of a high-powered expensive vehicle, there are very real safety concerns for the driver and other road users by putting an inexperienced driver behind the wheel of a speed machine,” says Mandy.

“When it comes to insuring a student vehicle, make sure you have cover at least for balance of third party, fire and theft, with, perhaps additional personal liability top up cover, given the risk of major claims in the event of an accident or incident where the young driver is proven to be negligent. Always specify the regular driver of the vehicle and the terms of its use to avoid any problems at claim’s stage,” concludes Mandy.