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Householders' Insurance
Tuesday, February 1, 2005
Cover update

The favourable underwriting conditions in the short term market, with premiums remaining fairly steady, present a rare opportunity for policyholders to review their personal lines insurance.
Steffen Gilbert, Chief Executive of Santam, says, “In the past year over 50% of our policyholders had no premium increases, while the rest faced very modest increases, taking the average to just 3%.”
During the previous cycle (1999 – 2002) consumers were confronted with steady premium increases due to high inflation, increased crime and the weaker rand. This discouraged them from keeping their insurance values in line. Indeed, policyholders even dropped assets off their lists of items to insure, or deliberately underestimated their value to save on premiums — much to their chagrin for those who had the misfortune to suffer an insured loss.
Comments Mr Gilbert, “This was an understandable reaction to what was a tough time for the industry and its policyholders, which is why we believe many people remain underinsured.”
However, thanks to the current favourable underwriting cycle, it is an opportune time for consumers to review their assets and values, and update their risk schedules so that they are adequately and correctly covered.
“Now is the perfect time for people to ask themselves about exactly which perils they are insured against,” advises Mr Gilbert; as for example, consider a person who has acquired a new watch, but controls costs by insuring it under household contents, and not under the all risks section. Now is the time to transfer the risk to the correct section, otherwise loss away from the home will not be covered.
While policyholders are welcome to value their assets themselves, Santam recommends they get professional help from an insurance broker.
“Anything of value should be photographed or serial numbers taken - any evidence of the value of the asset is a good idea. This is particularly true of high value assets that should be certified by a professional valuer.
“If the cycle continues, another little or zero premium increase can be achieved in the next year but it can’t last forever. We strongly advise people to re-assess their asset cover while the good times last.”

Copyright © Insurance Times and Investments® Vol:18.1 1st February, 2005
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