Most people are aware of what insurance is and the nature of the type of insurance they are taking when insuring their car, home contents or cellular phone. There are however some insurance terms that can be mindboggling, and even some that many people are unaware of.
Hippo.co.za, the comparison website that compares prices and benefits across a range of different SA car insurers, has helped compile a list of some of these.
People often insure the property of another, thinking that in the event that something happens to the property, they are able to claim for it. Insurable interest means that the policyholder must suffer a definite financial loss preceding an incident. You cannot, for example, insure a car belonging to a family member, unless you are the regular driver or have bought the car for them.
This term refers to any additional changes made to a building occupied by a resident, at his/her own cost. The policyholder will need to update his building cover accordingly, in order to ensure that the additional changes are covered for loss or damage.
Underinsurance occurs when one has insured their property, such as household contents, for less than its current replacement value. When your household items are under-insured, you will not be compensated for the full replacement in the event of a claim.
Ensure that you update your household cover every time you replace or upgrade items in your home. For the best deal, compare different household insurance options for the full replacement value of your household contents.
Sometimes people are unable to pay their insurance premiums on the agreed deduction date. The insurer will allow a grace period, usually within 31 days, to pay the missed premium to ensure that they are covered for that month. If two consecutive premiums are missed, and not paid within the grace period, the policy may lapse and they are left without insurance cover.
People sometimes miss the payment for their insurance premium due to unforeseen circumstances. The financial implication arising from an incident, such as theft or a car accident, far outweighs paying the monthly insurance premium. If you wish to re-evaluate your insurance cover, Hippo.co.za provides a free to use online comparison tool where you can compare quotes from various insurers by simply entering your details once.