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We are all facing financial strain during this time which causes us to make business and personal decisions which can benefit or harm our financial situation. It is always better to make informed decisions and not act hastily as this can cause more harm than good over the long term.

Before making any decisions regarding the insurance of your valuable assets, the following needs to be confirmed:

  • Assets subject to a bond, loan or leasing agreement always need to enjoy full comprehensive cover. This is a contractual requirement between yourself and your financer.
  • Make sure that your SASRIA (riot & strike) cover is in place during this time.
  • If you are not using your vehicle, request for a discount in motor, trailer and caravan premiums.

According to Warren Bennet from IBHOR Financial Services, there are a few guidelines to follow when deciding to reduce insurance cover to save some money on insurance costs:

 

Commercial/Business Insurance

It is not advisable to reduce or adjust the insurance related to the Fire section on your property bond neither to make any amendments on your Public Liability Insurance which includes Products Liability and Defective Workmanship Liability. Where you can, however, reduce your cover and save a few Rands, are on your Goods in Transit Insurance when no goods are being transported, and on your Insurance for Cash in your business when all money has been banked. 

 

Private Insurance Policies

When you have a bond on your property, you will have a contract with your bondholder which requires comprehensive insurance to be in place. Do not consider reducing the sum insured since under-insurance will not be waived. A higher excess can rather be taken to reduce the premium.

To save on your content insurance, a higher excess and limited cover can be taken to reduce the premium. You can further consider deletion of extensions which attract an additional premium. Where you should not make any changes are on your theft cover and any item on a lease or loan agreement; comprehensive cover is required to be in place in such an instance.

Risk items such as jewellery, sports equipment, laptops, cell phones, etc. should be handled in different ways. Expensive jewellery can be kept in a bank-safe during the lockdown period which will reduce the premium while sports equipment that cannot be used during the lockdown period can be removed from the cover or the cover can be reduced. It is not advisable to remove laptops or cell phones from your insurance as most individuals use this for business and theft or damage of these items can cause a financial loss. Any item on a lease or loan agreement needs to enjoy full comprehensive cover.

 

Vehicle Cover for Business or Personal Use

Any vehicles NOT IN USE and NOT on lease or loan can be reduced to Third Party, Fire and Theft (your security requirements still need to be in place e.g. immobiliser or tracking device will still be a requirement to enjoy theft cover) or Third Party Cover only. You can also reduce the usage of cover from Business use to Personal use for the duration of the lockdown. You can further remove Extensions and Cover that attract additional premiums such as excess busters or car hire. If you do make any changes to your vehicle cover, first make sure that your vehicle sum insured is up to date.

 

Important Notes

When instructed to reduce or change cover REMEMBER to give instructions to change it back later on. 

  • An average clause will apply if you are underinsured.
  • Each policy has its terms & conditions and cover can vary from Insurer to Insurer.
  • Consult with your Broker or Insurer as to available options before making drastic changes.

IBHOR Financial Services can assist you and provide advice on your current situation. Feel free to contact the Director, Warren Bennet on 010 593 4242 for any insurance-related queries.

 

Disclaimer

Information provided in this document is a general view of the insurance market today and does not constitute as advice.

The information provided needs to be read in conjunction with your policy schedule, wording, terms and conditions of your relevant insurer.

Should you wish to make any changes to your insurance policy please consult with your broker or Insurance Company before making the changes.

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