Gofaone Nina Tladi
I have a mini-heart attack every time I reach for my phone and it’s not there, mind you my phone isn’t even expensive but I look for it frantically until I find it and I sigh heavily from relief when I locate it. I can’t imagine the anxiety for those of you who have phones that cost more than P10 000. Short term insurance covers loss against theft, damage etc. of your property, car, household contents, the house itself and even your cellphone. The insurer will charge you a premium based on your risk profile (age, gender, past claims etc.) So, the higher the risk, the more likely you will pay more towards the premiums. Insurance is the luxury we simply cannot do without.
One of the most common types of short term insurance is car insurance, we need to insure our cars against, theft, damage and third-party damage. These are all considerations that we must consider when researching our policies. Here are some things to consider:
• Know what is included in your policy, third-party damage etc.
• Be transparent about everything, previous car mishaps
• The condition of your car and maintenance –tyres, battery, continued maintenance of your car etc. because insurance doesn’t cover those things
• What is “excess”, how it works and how you will deal with in when placing a claim (this is where our savings come in handy); and
• Know your policies and review them annually with your broker.
This is a repetition of last week’s column but it is worthwhile to go back to the basics and remind ourselves of certain things as we go on the journey to financial freedom.
An acquaintance of mine who works for an insurer once said that they are in business to pay claims, valid claims. Where insurers get a bad reputation, I think, is because of our own ignorance of the terms and conditions and other specifics of the policies we take out. One of these is the payment of premiums, I take out an insurance policy for example and complete a debit order form and for some reason or the other these premiums aren’t deducted as they should and I default on my insurance policy.
The default period is usually three months and then your policy lapses. I’ve seen many people up in arms about this but to play the devil’s advocate for a minute, it remains your responsibility to pay premiums, to keep your end of the bargain. For example, if you use a debit order for your rent and in a particular month it does not go through and this happens for three months, would you be shocked to find an eviction notice from your landlord or if at work your employer didn’t pay you via the usual channels, we would all be up in arms.
My point is that it is your responsibility to make sure the premiums are paid, either over the counter or however else and query the failed debit order instruction until it is affected accordingly. If unfortunately, your policy has lapsed you can go back to the insurer and start again, the waiting period may apply to you again, starting from zero in a sense but like I said, insurance is the luxury we simply cannot do without. In addition, insurance companies must also protect themselves from fraud hence the seemingly stringent terms and conditions. Insurance has come through for us more times than we care to admit, but we still have a very negative attitude towards it because of our limited understanding of how it works. I would advise you to register for those CoP Basics Insurance courses, to get a better understanding of how insurance works, to read your policy documents closely, ask as many questions as possible and ensure your premiums are being paid. There is a saying, the price of ignorance is immeasurable. In Botswana, we take education for granted but it is truly the envy of many of our neighbours, we don’t want to read but indeed, “Thuto ke Thebe.”
PS: You don’t have to be a hero, you just have to be what most people aren’t, consistent. Next week we discuss black tax.