Insurance. It’s the monthly expense everybody loves to hate – until disaster strikes, and then suddenly it’s the best thing since Nutella. But it doesn’t have to be that way. We could all have a far healthier – and happier – relationship with insurance if we understand our risks better.
In insurance terms, risk is the chance that something unexpected can happen that causes loss or damage of valuable property and belongings, or injury to someone. Most people engage in basic risk management every day without even thinking twice about it, says King Price’s client experience partner, Wynand van Vuuren.
“We drive responsibly. We lock our houses when we leave home, and we make sure our cars are locked when we park them. We keep our wallets and mobile phones with us when we go out in public. So why wouldn’t we take the same level of care when it comes to protecting the other things that are important to us, like our homes, our cars and our precious belongings?” says Van Vuuren.
There are three steps on the road to better risk management for consumers.
1.Establish your risks
Before you buy insurance, know exactly what your own risks are, how you can reduce the likelihood of them occurring, and how you can reduce their impact if they do occur.
“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?” says Van Vuuren.
For example, if you use a car on public roads, but you’re only insured for third party, fire and theft, you won’t be covered for accident damage – which is the most frequent loss that insurers see.
2.Review your existing insurance
Take a good look at your current insurance schedule, and what it covers. Are you paying for assets that you don’t need, or possibly don’t even 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 you working from home, and your house is always occupied? Are you driving less, and could shift to a ‘pay perk’ product like King Price’s chilli? These are all areas where you can save money by demonstrating lower risk.
When it comes to home contents, for example, most of your premium goes towards covering theft risk. If you live in a secure complex, it’s possible to exclude theft risk, while staying covered for fire, floods and other perils – and save up to 65% in the process. 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.
3.Talk to your insurer
The days of one-size-fits-all insurance policies are long gone. Today, most insurers can structure an insurance package according to your needs. “If you feel you’re paying too much for your short-term insurance, don’t settle for the first quote you get. You’ll be surprised by how much premiums can vary between insurers for exactly the same vehicle and home cover,” says Van Vuuren.
If you can combine all your policies with one insurer, even better. Most insurers will give you a discount for bringing all your business to them, starting with additional savings for putting more than one car on the same policy. Try including your home insurance and your house contents cover as well, and your savings will increase even further – and your life will get a whole lot easier, with the peace of mind that all your risks are covered.