Ask the right insurance questions

Part 1IT is often difficult to think of all the relevant questions to ask upfront when taking out an insurance policy. Unfortunately once things have gone wrong, it is easier to spot the questions you should have asked. The guiding principle is what to disclose to your insurer or not to disclose at all.

Since people in the insurance industry knows what kind of things can go wrong, they are the best placed to advise on the questions that should be asked.
Why am I paying more if my vehicle is of the same value as my neighbours?? Part prices could be different or the frequency and severity of accidents could vary from vehicle to vehicle. While smaller new cars and the older luxury models might retail at the same value, their repair costs are very different.

You may also have a different risk profile to your neighbour. Do I need to tell my insurer that I am renting out my house? Insurers rely on the information clients supply to accurately assess the risk that they face. This is why clients must advise their insurance providers of any changes that may affect their risk profile.

Insurers use this information to assemble the most suitable cover for a client?s lifestyle. As such, any changes that improve a clients? risk profile should also be passed on as this may result in lower premiums.

By the same token any changes that negatively impact a clients? risk profile must be disclosed to allow the insurer an opportunity to rerate the policy, impose terms and conditions, revisit excess structures and in a few cases decline cover.
Is my home insured for its correct value? A home should be insured for the cost to rebuild all the buildings from scratch. If you do this, your insurer will cover the costs of rebuilding your property to its original dimensions and quality in the event it is destroyed or damaged.

Yet inflation sees the cost of building increase every year. As such, home owners should regularly update their policies to avoid being underinsured. The insured value should exclude the value of the land itself.
How can I lower my monthly premiums?There are many ways to do this ? you may increase the security of your property or you could take on a share of the risk yourself, by taking a voluntary excess, or by reducing the scope of cover.How long does a bad driving record affect premiums?Most insurers use a ?Claim Free Group? system. A discount accumulates for each year that you don?t claim, and each time you claim the discount is reduced. Client loss ratios are measured over time. So, the longer one is with an insurer and the better one?s claims record, the lower one?s premium is. What if I miss a monthly payment?If you miss a monthly payment your insurer is within their right to reject a claim. Most companies, however, do provide a period of grace. (Most common is 15 days from the date that payment was due.) Alexander Forbes will only reject a claim after a second consecutive missed payment.

The above list of questions is not conclusive. If you have any enquiries about your insurance cover, approach your insurer or read your insurance policy thoroughly to understand the terms and conditions of your cover.

The only facts that count are those embedded on your insurance policy.

For more information, please contact Alexander Forbes Insurance at 061 270 4721.