Years of studying finally paid off and now you’ve gotten that first job that you have always wanted. As a newly dubbed young professional, you’ll get to experience all the wonders and freedom that comes with your newly attained independence. But let’s be honest, adulting is hard – especially if you’re a newbie. Terms like short term insurance, excess amounts and sums insured might not be part of your everyday vocabulary and if you’re not careful, you might end up making mistakes that will cost you in the future.
Taking out a short-term insurance policy for the first time can be a difficult and daunting experience, but it doesn’t have to be. The best way to conquer the world of short-term insurance is to have a qualified and experienced short-term broker by your side, click here to find out more about Cornerstone Insurance Brokers.
Another great way to prepare yourself is to make sure you are aware of all the possible pitfalls that you might encounter when taking out your first short-term insurance policy. To help you get started, here are the most common rookie mistakes you could make and how to avoid them:
Not taking out comprehensive car insurance because it’s too expensive.
As a first-time insured individual who might be under 25, you will pay more for insurance than someone ten years your senior. Therefore, you might be tempted to take out non-comprehensive car insurance, because the monthly premiums are more appealing – try to avoid this as best you can. Policies that only cover incidents relating to fire, theft and third-party claims are not suitable for most young individuals. It usually excludes cover resulting from any accidents, weather conditions or accidental and malicious damage to your vehicle, meaning you will have to fund a big chunk of your losses from your own pocket. It is therefore imperative that you always take out comprehensive insurance on your vehicle to avoid any nasty surprises in the future.
Accepting the first quote you get.
The insurance industry is highly competitive which is why you should get many quotes from different insurers to make sure you are getting the best bang for your buck. Don’t be tempted to accept the first quote you get just “to get it over and done with”. Remember, always make sure that you compare apples with apples by checking the fine print and terms and conditions of each quote to make sure that they offer the same cover and service.
“I probably won’t claim, so I’m not too worried about excess”.
Wrong! No one ever thinks they’ll claim…until they must. Don’t only compare monthly premiums, check your excess amounts as well to make sure you are getting the best deal. Also, remember to keep some emergency savings aside to fund any future excess payments. Many insurers offer options where you can opt to pay a lower monthly premium with the trade-off that your excess amount is increased substantially. As someone who has just started working, your chances of already having thousands of Rands tucked away for excess payments might be unlikely, so be weary of these offers.
You’re underinsuring your belongings to save on monthly premiums.
This is by far the worst thing you can do. The whole point of short-term insurance is to provide you with the financial means to replace your assets if they are damaged, stolen, lost etc. If your sum insured is lower than the value of the assets listed on your policy, there really is no point of having short-term insurance. If you intentionally decrease your sums insured and you need to claim, the pay-out won’t be nearly sufficient to cover your losses and you will most likely suffer a huge financial knock.
We hope that with your newly found knowledge about the tricky world of short-term insurance, you should be more empowered to tackle any obstacles you might face. Remember, being educated about the insurance industry is good but having a specialist by your side that does all the work for you, is much better. Get in touch with us today to find out how Cornerstone Insurance Brokers can help you live without the stress and hassle that can come with having a short-term insurance policy.