Year two of Covid; insurance ‘more important than ever’
It’s no secret that many South Africans are struggling financially right now. According to TransUnion’s latest Consumer Pulse Survey, more than half of South African consumers (55%) say their household income is still being negatively impacted because of Covid-19.
Unfortunately, short-term insurance is often one of the first items to get the chop when we’re looking to trim our budgets. It’s not surprising, says Wynand van Vuuren, the head of client experience at King Price Insurance: insurance has long been a grudge purchase for many consumers.
However, Covid-19 is making people look at their risks differently. One of the surprising effects of the pandemic has been a surge in insurance cover as clients look to better manage their personal risks in an increasingly unpredictable world.
“Insurance is not a ‘nice-to-have’. It’s absolutely critical to protect yourself from a range of risks, especially in a time of crisis. Insurance makes the difference between recovering from an accident or disaster, or possible financial devastation,” says Van Vuuren.
“Insurers aren’t just people who provide insurance. We’re partners to our clients. We’re key role-players in building resilience into our society, and as such, the industry has a massive opportunity to build new levels of trust with its clients and stakeholders in 2022.”
The past two years have seen insurers adapting positively to the Covid-19 crisis and working hard to become more customer-centric, making it easier than ever for consumers to do business with them and creating products that can meet rapidly evolving market needs. They are increasingly able to customise cover for specific items and events, and it is also quicker and easier to settle and pay claims following an accident.
What are the key issues to consider before committing to a policy?
Know your risks - and insure accordingly
It starts with knowing where your risks are. “Think about where you might be vulnerable to loss or damage, and whether you can cover the damages yourself if something were to happen. What happens if you have a car accident, or your house burns down? How would you recover from such an event? Then talk to your insurer to cover those risks,” says Van Vuuren.
Review your existing insurance
Take a good look at your current insurance cover. Are you paying for assets that you don’t need, or don’t own anymore? Do you insure jewellery that’s kept in a safe and never worn out of the house? Do you have shortfall cover on cars that are paid off? Are your cars a year older, but you’re still paying last year’s premium – or higher? Are you working from home, and your house is always occupied?
These are all areas where you can save money by demonstrating lower risk. You can also reduce your risk (and your premiums) by installing additional security measures like electric fencing and an alarm system linked to armed response, says Van Vuuren.
Combine your policies
Insurers love clients who have more than one policy with them – and they’ll generally reward you with a discount. So, if you cover your house contents and a car, for example, you’ll pay less. You’ll also benefit from a multiple car discount if you cover two or more cars – up to 20%, in some cases.
“There are lots of relatively easy ways to cut your expenses, without giving up your insurance and leaving yourself exposed. Even small amounts all add up. Then you can redirect those savings into something that pays off debt or helps towards building the life you dream of,” says Van Vuuren.
