An old friend was ranting on Facebook about how she is so disappointed in this country’s high crime rate and that the system is failing her. Her rant seems legit, right? Most, if not all, of us feel the same. She had parked her car outside a busy clinic, which was right next to the office she was headed to for her meeting. She came back and her car’s tyres had been stolen. Obviously, she could not have anticipated that, but this has set her back by about R10 000, which she had to deduct from her daughter’s university fund.
The logic of paying monthly premiums for something that might happen is what stops people from wanting to take out a short-term. “I’m a good driver, so I won’t need to claim for a car accident.” Yes, but this does not mean that you won’t need another form car cover.
This brings us to the reason why you need short-term insurance. As the name suggests, short-term insurance is financial relief for incidents that may occur sooner rather than later. Examples of these are home insurance, car insurance and medical insurance. For consumers, short-term insurance is seldom a top priority, and the consideration for it comes in when incidents requiring immediate relief occur.
Not to be undertaken lightly, short-term insurance is a necessity that consumers should approach strategically using a balanced approach. Just as with anything else involving finance, this insurance must be assessed with the risks and factors that come with committing to a policy. The risks that the consumer is exposed to, together with the items they need to insure, will determine the appropriate cover they may need.
For example, risks assessed for car insurance may be the following:
With the chosen insurance company comes extensions, deductibles, excess and premiums. These vary according to the risk assessment and while benefits will naturally attract consumers, it is also advisable to thread with due diligence by evaluating what will best suit your pocket and offer you value when having to claim from insurance.
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)