The importance of insuring gifts

As the country recovers from the annual festive spending spree, most short-term insurance policyholders have not considered the implications of reviewing their policies. Fortunately, Mutual & Federal, one of South Africa’s leading short-term insurers, is addressing this challenge by appealing to all brokers and intermediaries to inform policyholders about the importance of insuring gifts.

Edward Paul, general manager of Product, Actuarial and Reinsurance for Mutual & Federal says, “Short-term insurance cover is probably the last thing on policyholders’ minds as soon as they receive a gift. That is why we are encouraging our brokers to contact their clients and remind them to insure their expensive gifts. Not only will this cultivate the relationship between policyholders and brokers, it will also assist policyholders in being adequately prepared for any unexpected risks.”

As a part of the service to their clients, brokers should proactively contact policyholders to inform them of new developments in the industry or the implications of increased risks. In the unfortunate event of a loss, policyholders would welcome the fact that they are adequately insured - thanks to the excellent service offered by their trusted broker.

Expensive gifts such as jewellery, electronic gadgets and certain fashion accessories should be itemised and insured as soon as they are unwrapped. Paul continues, “Policyholders often take for granted that they are adequately covered. Gifts that the policyholder removes from his private residence, such as a cell phone, will not be covered under household goods. Instead, these gifts should be specified under All Risks cover.”

Brokers need to obtain as much information as possible regarding the gifts from the policyholder in order to insure them effectively. The value of the gifts being insured might have an effect on the policyholder’s monthly premium. However, in the event that a policyholder is hesitant to pay this increased premium, brokers should remind clients about the dangers of being underinsured.