South Africa is currently in an adjusted Level 4 lockdown due to the third wave of Covid-19, and some jobs and incomes are undoubtedly going to be affected again.
Many people are going to relook their budgets to try and save some money.
One of the many cost-cutting measures people put in place is cancelling their insurance.
There are people who are still waiting on TERS payments from last year.
The tourism and hospitality industries are still practically broken, and just as the restaurant industry was starting to see the light, along comes the third wave and the new lockdown.
People need money for things like food, electricity and transport, so I can understand the need to cut costs.
Yet, considering the number of hijackings, burglaries, accidents and daily thefts in South Africa, along with third party costs and fees, I can also understand the reasoning behind not cancelling your insurance.
Perhaps it is a better idea to do a complete review of all your insurance products before taking any steps.
Here are 10 tweaks from Budget Insurance, which can help you reduce your monthly insurance premium while still remaining insured:
1 - Insure your vehicle for the correct value
Vehicles depreciate in value. Drivers of older vehicles must ensure that they are not over-insuring their cars.
2 - Update your home contents policy
When it comes to home contents insurance, opportunities to reduce coverage could lie in carefully and regularly updating your household inventory.
Review things every six months and adjust the total insured sum accordingly.
When you calculate the insured amount of your home contents, make sure you are using replacement values and not market values.
The replacement value is what it would cost you, at the time of a claim, to replace all your belongings with similar brand new ones.
Remove old and discarded items that no longer need to be insured from your inventory list.
Why should you pay for coverage on a computer that stopped working in 2013?
Also, the costs of some appliances and gadgets have come down in price so you really shouldn’t be paying to insure an item that was more expensive when it first hit the market than it is nowadays.
3 - Don’t duplicate coverage
If your car or home insurance company offers free roadside assistance, you don’t need the same benefit from your medical aid provider.
4 - Increase your security
Your car, home or buildings insurance premium is calculated based on your risk profile.
Your risk profile is based on a number of things such as where you live, the type of car you drive and the security measures you have in place, amongst others.
You could reduce your car insurance premium if you’ve fitted your car with additional safety features such as a tracking device or an alarm, or even if you have moved into a safer area.
5 - Don’t claim unnecessarily
Keep your insurance for real catastrophes which result in unexpected large losses and avoid claiming for small events that you could cover from your own pocket.
When you claim for every little scratch, your insurance provider will raise your premium to reflect that you are a higher risk.
6 - Increase your excess
You could save some money on your monthly insurance premium by increasing the excess you pay when you claim.
Ideally, you want to pay the lowest excess you can in the event of a claim.
However, opting for the lowest excess might make your premium too expensive for you.
It is best to find a balance where you’re paying a reasonable premium and your excess is not too high that you won’t be able to cover that amount should you need to make a claim.
7 - Combine your policies
By insuring your car and home contents, or your car and buildings insurance with the same insurance provider, you could qualify for a discount.
8 - Shop around
A bank will often put great pressure on a homeowner to insure through its associated insurance company, but it really doesn’t matter which insurance company you use, as long as you insure your home.
This leaves you free to shop around for the best deal.
9 - Review your cover on a regular basis
As your individual needs change, so may your insurance needs.
You may no longer need full comprehensive cover on an older or second vehicle.
10 - Make sure you keep your details updated
Insuring your vehicle for private use if you no longer use it for business, or if your vehicle is now parked in a more secure environment overnight, like inside a locked garage, will save you money, so let your insurer know.
It is always a good idea to do a complete review of your finances on a regular basis.
By being honest about your income and expenses when doing your budget, and prioritising needs over wants, you will hopefully be able to save some money for necessities or even start an emergency savings fund.
If Covid has taught us anything, it is that life is unpredictable and we never know what is coming our way.