Don’t break the bank fixing a home break-in

The only time it’s good to think in the short-term
October 9, 2018

Consumers are normally urged to invest their money for long-term financial prospects, but will they get there if short-term accidents can happen unexpectedly?

Putting money aside for the twins’ education may all change in the case of a break-in your December season beach home where you find that you once had furniture. Now you, the wife, the twins and the dog are arguing as to what option is best – just cancel the entire holiday and go back home, buy a few items here and there just so you at least have blow-up mattresses to sleep on, or take out a chunky loan to replace all the stolen furniture. The dog just wants a comfy cushion.

Short-term insurance, regulated by the Financial Services Board in terms of the Short-term Insurance Act, is the financial relief for a risky event that could happen at any time – next year, next week or in the next five minutes. This insurance is never top of mind, but consumers must take a strategic approach when planning and assessing which short-term insurance policies they may need.

The monthly premium may appear attractive, but with insurance policies comes deductibles, extensions and excess payable when claiming. That said, the claim is intended to balance out where the consumer’s situation was before the incident had taken place. Isn’t that relieving? That 78-inch crystal display SUHD TV will be back and you’ll be competing on your Nintendo Wii Fit as soon as your claim is approved.

Short-term insurance is not a lifetime commitment and may be cancelled when the consumer requests that this should be done, or lapse when the consumer fails to commit to payments agreed upon previously.

The following must be remembered:

  • A person cannot claim from more than one insurance company for damages caused by the same incident
  • When a policy is cancelled, there is no refund given on premiums already paid

The chosen insurance company may request an assessment of the risk involved with the consumer and may select suitable premium payment accordingly. As the market changes, it is advisable for the consumer to continually review their chosen insurance policy to align and cover in accordance with those changes.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)