5 reasons to review your insurance policy at the start of the year

With the start of a new year comes the motivation to tackle our aspirations for the months ahead. But when we set new health, career, or life goals, what often goes unnoticed are our insurance policies. Since “life events” such as buying a new car, renovating your home, moving or moving to a new area/city/province, or gifts received during the holiday season may cause your insurance needs to change, it is important to regularly evaluate and change your policies with your lifestyle goals.

Reviewing your policies each year allows you to assess whether your insurance needs have changed and whether you need to streamline your insurance policies. It can save you money by reducing your policies and premiums, consolidating your policies, or filling gaps in areas that need additional coverage.

“What better time than the start of the year to think about your insurance needs? Start by looking back over the past year and thinking about events that have happened so you can align your insurance needs. This will help mitigate the risk of being over-insured or under-insured and will save you from unpleasant surprises in the coming year,” says Dr Hardy Ncube, Personal Products Manager at Standard Bank Insurance. With the advent of COVID-19, many of us have gone through more life changes than usual. Maybe you changed jobs, started a new business, your parents moved in with you, or sold your car because you now work from home. Travel and entertainment limitations may have spurred spending in other areas, such as home renovations, new appliances or investment in art and luxury goods.

Dr. Ncube suggests considering the following when evaluating your policies, to make sure nothing goes under the radar and to make sure you’re not paying for something you don’t need.

1. Life events require policy updates: Birth or adoption of a child, inheriting inheritances, changing jobs, moving house, starting a business or buying and selling assets are some of the factors which will change insurance requirements. Depending on the circumstances, these events could increase or decrease your insurance needs. Assets such as jewelry and electronics that were acquired during the holiday season should be properly specified when updating your insurance policy. Additionally, those who have moved should update their addresses with their insurers.

2. Attrition can affect your premiums: Make sure your belongings are insured at the correct replacement value and not at the original purchase price. Cars, furniture, and electronics are all assets that typically lose value over time, but replacement value could also increase due to fluctuating exchange rates and shortages of goods. Doing regular appraisals and policy reviews on these items will help ensure that you are properly covered at replacement cost, which may be more or less than the original purchase price.

3. Home improvements could leave you underinsured: All home improvements and renovations can increase the value of your home. As such, policies need to be adjusted to reflect higher values. Your policy should also properly account for the contents of your home and any valuables you may have acquired after your last policy update. If not done correctly, it could leave you underinsured and a reimbursement of a claim may not cover or replace the full value of the assets.

4. Less risk means more savings: All insurance policies are priced by calculating the risk factors involved. Ultimately, lowering your risk will lower your insurance premiums. For example, a security system can lower some of your home’s risk factors and therefore your insurance premiums.

5. Consider lifestyle changes: The shift to hybrid and remote working has resulted in fewer people traveling between home and work daily. This means the money saved by paying less on car and home insurance can be used in other areas such as increasing your monthly bond payments or saving for emergencies. “Standard Bank Insurance Brokers has a team of experts who can advise you on all your short-term insurance needs. There are different cover options available, all of which are subject to the terms and conditions of the insurer and in based on the personality of the customer. With our innovative offerings, we can meet your coverage needs, while helping you save on premiums wherever possible,” adds Dr. Ncube.

This post and content is sponsored, written and provided by standard bank.

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Justin D. O'Neill