Short Term Insurance should make up a fundamental part of any financial plan and needs to be considered by anyone who has valuable items that cannot be replaced easily.
Short-term insurance delivers a level of peace to the household budgeting mind. It is also extremely useful in protecting everyday items like smartphones, tablets as well as laptops, that are often stolen or lost and can cost a lot of money to repair and replace.
If you don’t have insurance, you would need to save an amount equivalent to your valuables in the unfortunate event of damage or loss. For example, imagine replacing a R200 000 car that has been written off in an accident. With short-term insurance cover, your asset is protected, enabling you to save thousands of Rands that would have been needed to replace lost or damaged items.
Insurance can have a great impact on personal finance, as in the short-term, it takes money out of your pocket, but the potential of mitigating risk is huge. The best comparison would be the option between losing R1000 a month or R500 000 if something were to happen to your home.
Some factors to keep in mind with short-term insurance:
- Most individuals and companies also do not realise that it is important to review, and not merely renew, your insurance policy every year. You need to ensure that you are insured for the correct amount and that your policy reflects any changes you have made. For example, you may have bought a new TV or completed home renovations, and therefore you need to adjust the sum insured accordingly. It is worth ensuring that any policies are up to date, in line with the market and that they cover any changes made over the course of the year. Many people do not stay abreast of the impact of inflation by ensuring that their buildings and house contents are insured for the relevant and current replacement costs. All items must be insured for full new replacement value including VAT.
- Insurance offers a safety net. It provides a measure of security if faced with unexpected events. It also needs to be selected, fine-tuned and allocated in accordance with personal risk appetites, budgets and requirements.
At PW Harvey & Co, we offer short-term insurance solutions to both the domestic client (house, cars, contents, etc) as well as the smaller commercial client. We make use of reputable insurers such as Old Mutual Insure, Hollard (Insurance Zone), Santam, Discovery, among others. We are not a direct insurer, but a broker, which advises on the product that best suits their client’s needs to protect their assets.