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Things you need to know about Car and Home Cover


Understanding your insurance is vital to avoiding surprises in the event of a claim.

by: Wade Profe

When you take out insurance for your vehicle or household, three things are very likely to happen:

  • The insurance representative goes through a long list of terms and conditions with you.
  • Your insurer sends you a long policy document.
  • You don’t read or listen to any of it.

It’s understandable. You’re busy. You don’t have time to study a long list of legal jargon. But understanding your insurance is vital to avoiding surprises in the event of a claim.

Every insurer is different, and you should familiarise yourself thoroughly with all the terms and conditions of your specific insurer.

However, there are at least three essentials to remember:

Information is king

You have an obligation to ensure your insurer has the right information, so that they can properly evaluate the risk you pose. If you have not provided your insurer with accurate information, they have grounds to reject a claim.

The average clause

When you insure the contents inside of your house, you have to cover yourself for a particular amount. This amount must reflect the total value of all moveable contents inside of your house.

A small studio flat can easily accumulate over R150 000 of household contents.

If you are underinsured and make a claim, your insurer will impose the average clause. This means that if you are insured for R100 000, but your household contents are worth R200 000, your insurer will only pay 50% of your claim (100 000/200 000 = 0.5).

The excess is waiting for you

For any insurance policy, the insurer is always responsible for (claim amount) – (excess/es). Most policies have a basic excess, which means the amount that you are responsible for every time you claim. An average excess can easily be between R3000 and R6000. This excludes any additional excesses which may – many policies impose additional excesses based on when you were driving, who was driving, or when you claim.

The reality is that forking out R3000+ in the event of a claim is not an easy thing to do for most people. That’s why it’s important to be aware of your policy excesses, and plan appropriately for them.

Insurance can be tricky. That’s why it’s important to seek professional advice.

If you haven’t spoken to a professional broker, contact a SmartInsure consultant for more information and a free assessment.

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