Do these things before cancelling your short-term insurance policy

Do these things before cancelling your short-term insurance policy

Jaco Erasmus – Director of Cornerstone Insurance Brokers

Thousands of South Africans have lost their income or a portion thereof due to COVID-19 and the unavoidable precautions that were put in place to help mitigate the spread. As a result, many people have tried to decrease monthly expenses by cancelling their car and household insurance policy, thereby putting themselves at massive risk if any of their belongings are damaged or stolen. Cornerstone Insurance Brokers have been and will continue to ensure the financial wellness of our clients and we would strongly advise against cancelling your insurance policy, unless there is no other choice.

To help you, our valued reader, get through these trying financial times, we have put together a few options you can consider instead of cancelling your insurance policy:

Recheck your contents insured

Too many individuals pay for cover on items they no longer own or no longer need insured and now more than ever, paying for unnecessary cover should be avoided. If you have sold or given away any high value items and you haven’t updated your contents insured, now is the time to do so – it may save you on your monthly premium.

Consider temporarily increasing your excess to save on monthly premiums

Since the national and its subsequent lockdown levels were introduced, many, if not most insurance providers have given members the option to increase their excess in order to lower their monthly premiums. Although this is a viable option, it is important to understand the risk associated with it. Although your premium will be lower if you increase your excess, you will be liable for that increased excess amount if you need to claim.

We would strongly advise that you reach out to a qualified and registered short-term insurance advisor before changing your excess amounts as it could have a negative impact on your financial wellness.

Cautiously consider downgrading your insurance policy

This option should only be considered in extreme cases as the risk associated with it is very high. Downgrading your comprehensive insurance policy from comprehensive to third party, fire, theft will give you a lower monthly premium, but your cover will also decrease substantially. Although the cover is limited, it is still better than no cover at all.

Once again, please remember to speak to a registered short-term insurance provider before opting for any of the above-mentioned options to ensure you understand the impact this might have on your financial wellness.

If you have any questions regarding your short-term insurance policy, regardless of the provider, remember to get in touch with Cornerstone Insurance Brokers. Call us on 011 794 6611 or email for more information.

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