Until recently, the South African economy was flying. Although slightly
more indebted than the average consumer elsewhere in the world, we
still had the luxury of spare cash in our pockets. The retail boom at
the time bears evidence to the fact that South Africans were
industrious at employing this cash, in addition to their readily
available lines of credit, to add appliances, furniture, kitchenware,
jewellery, leisure equipment and the like to their growing lists of
Most of us will be surprised if we had to do a comparison of our
pre-boom and post-boom household inventories, by just how much our home
contents have increased in size.
Now, with our wallets becoming rapidly thinner, many consumers
are sorely tempted to cancel their existing household insurance
policies. Quite frankly, this would be pure folly. Replacing even just
a half of our possessions, if anything untoward should happen, is
likely to be well outside the financial means of most of us.
Instead of taking drastic measures that could leave you
financially vulnerable, rather become insurance savvy. Not all insurers
are equal, and not all their rates are the same. If you get smart about
your household insurance, and if you shop around for a bit, you may be
able to trim back on the premium you have to pay every month, without
having to run the risk of being un- or under insured.
If you had to set out right now to find a cheaper household insurance
premium, chances are that you will find some insurer somewhere along
the line who is quite prepared to shave off a few meagre bucks in order
to get your business. The amount you stand to save in this way is
perhaps not really worth the rigmarole of moving your policy elsewhere.
Should making significant household insurance savings be your
aim, view it as a give and take scenario: you have to give, before you
can start taking. Here is a four point plan to help you get your house in order:
1. Check your inventory. Take the previous inventory you submitted to
your insurer, compare it to what you now have in your house and revisit
the replacement values you initially documented. Be sure to take a
realistic tack on the matter so as to avoid the traps of under- and
over insurance. Also reconsider the specified items on your insurance
policy to ensure that you still have everything you have specified and
to re-evaluate the necessity of keeping some of these items on your
specified list from a cost perspective. 2. Revisit your excesses. Check the excess sum you need to pay should
you file a claim at your insurer. If you can afford to pay more in
excesses, calculate exactly how much more. Increasing the excess amount
affords you the opportunity to reduce your monthly household insurance
premiums. 3. Revisit your claims history. If you have filed no or very few claims
in the past, this should translate into an improved risk profile. Check
whether you have been given any credit in the shape of reduced
household insurance premiums by your insurer. If not, make a note of
4. Crank up your security. Most people have some form of
security in place to protect their properties, but does your set of
security measures make the grade? To find out, speak to your current
insurer. Ask them what you can improve from a security perspective that
could reduce the risk and improve your household insurance premiums. If
the difference between your current premium and your potential premium
makes the expense worth your while, do it.
When you complete your application forms be forthright in your
responses. If you fail to disclose information or provide untruthful
information pertinent to the insurer’s risk calculations, they may
legally refuse to compensate you when you lodge a household insurance
claim. Although succumbing to this temptation may save you some money
on your household insurance policy right now, it is likely to cost you
dearly in the end.
Liso Consulting is A South African Insurance Broker offering short term
insurance cover. Whether you require Corporate insurance, business
insurance or domestic insurance, we represent most insurance companies.
We offer the best insurance qoutes to suit your individual needs.