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Personal Lines Insurance
Thursday, April 16, 2015 - 16:46
Going further…

The 2015 budget speech left little room for celebration. Personal income tax is up, fuel levies are up, as are sin taxes. Most of us have little or no control over these spiralling expenses and our budgets gasp as we try to squeeze in the additional expenditure. But there are ways to make our money go further … even in the unlikeliest places.

Innovation Group’s Managing Executive for Insurance, Jonathan Holden, identifies 10 tips to turn pricey-but-necessary insurance into budget boosting cover.

  • Structure your excess carefully

A higher excess can reduce your monthly premiums. As the self-insurance portion of our risk cover, an excess can be structured to suit our specific needs and, more importantly, our specific pockets. By analysing our individual financial commitments, it is possible to identify the amount that we can comfortably carry in the event of a claim.
An excess kitty can be earmarked for emergencies and, if you are lucky enough not to claim, this sum becomes an annual saving instead of an expense.

  • Update the market value

Most vehicles decrease in value every month. It is important to ensure that you are not paying to insure a brand new vehicle when you’ve been driving it for 5 years. Many consumers assume that the market value is automatically amended but, in most instances, this is not yet the case.

  • Don’t disregard the discount

Most risk improvements can be coupled with a premium discount. Security systems, tracking devices and related measures all have an influence on your monthly insurance outlay. Be mindful of the factors that drive the structure of your policies and make sure that all enhancements are disclosed to your insurer.

  • Consolidate your policies

There is little risk in consolidating your insurance policies under one provider. The financial benefits of cross-subsidization (one policy that reduces the cost of another) can be substantial. Shop around. Make sure that the company you pick can accommodate all of your insurance requirements, from vehicles and household contents to special purpose assets such as your son’s jet ski or the family caravan or even your daughter’s horse.

  • Be aware of unnecessary policy riders

Some so-called ‘free’ benefits can be costly. Typically an insurance rider supplements an existing policy with more coverage but this extra service may prove to significantly increase your premium. Do you really need additional cover or an array of services that are not a part of your lifestyle? Check that the premium for value added services is absolutely necessary and that you have the most suitable products for your particular lifestyle.

  • Check for duplicate coverage

Duplicate cover does not mean duplicate pay-outs. Check your policy documents to ensure that the same assets are not insured under more than one policy.

  • Investigate appliance warranties

Mechanical failure and breakdown are usually not covered under normal household policies. These costs can wreak havoc on a tight budget. Appliance warranties cover the repair (or replacement) of household items due to mechanical failure and can be extended to cover surge and lightning damage which may be exclusions on a standard contents policy.

  • Consider cheaper premiums rather than a no claim bonus

Innovative insurance companies are able to offer different methods of saving. Although a no claim bonus may seem like a windfall – a monthly saving may make better fiscal sense. Use your broker or customer service agent to structure a flexible and versatile policy centred on your needs.

  • Ensure that your insurance matches your assets

There is no need to insure average priced items at exorbitant replacement values. If you are over- or underinsured it will affect the value of the pay-out in the event of a claim. If you dispose of assets, don’t forget to advise your insurer to remove them from your cover.

  • •Ask questions

Read your policy documents before you put them in a file at the back of a cupboard. Make sure that you understand the fine print. Contact your broker or a customer service line if anything is unclear or confusing. After all, an insurance policy is simply a piece of paper with a promise – ensure that it’s a promise that protects your best interests.
 

Copyright © Insurance Times and Investments® Vol:28.4 1st April, 2015
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