I had an interesting question from a client just last week.
He wanted to know what ‘all risks’ meant exactly?”
Let’s be honest…It’s a good question, right?
I mean, does it pay out if I lose my R10, 000 bicycle after losing a bet? Sounds like a long shot to me!
Or what if I leave my laptop on a hot stoveplate and it melts… Am I covered for this under all risks? Sounds like a long shot as well, doesn’t it?
So here goes…
Basically any risk that is not excluded in your policy wording is covered. So if you drop your cellphone in the swimming pool, it’s covered. If a car reverses over your bicycle, it’s covered. If your GPS is stolen from your car, it’s covered BUT…
You need to watch out for the exclusions
Study your insurance policy wordings!
For instance the Momentum short term insurance has a special condition or exclusion applicable whereby if the insured item is left in an unattended vehicle then it must be placed in a cubbyhole (Is it still called that?) or a locked boot. There must also be visible signs of break in in order for them to entertain your claim.
Here’s something else you might not know.
You’re insured for loss anywhere in the world!
Drop your camera overboard while navigating the waterways of Venice on a gondola? Don’t worry…it’s covered!
Obviously this type of insurance is expensive so you only want to insure items that leave the home regularly.
What type of items should I insure under all risks?
Well, for instance:
- Expensive watches
- Cell phones
- Jewellery
- Bicycles
- Cameras
- Laptop computers
- Apple Ipads
Are we still on the same page?
You can also insure unspecified items.
This would cover you against loss of items of clothing such as:
- handbags,
- hats,
- scarves, and
- shoes.
What happens with unspecified items is that you quite often have a sub-limit per item claimed. The insurer might say that the maximum amount that they will pay in the event of a claim is R1, 500 per item. This means that things like bicycles worth R1, 500 or less can be claimed under unspecified items.
What should you consider before insuring an item under all risks?
One of our clients has an expensive – dare I say it – fur coat which she never uses. Our advice to her was to insure it under the contents section and let us know if she ever planned on wearing it to functions.
- I would recommend asking whether you can absorb the loss yourself?
In my case I carry a cheap and nasty old cellphone, so anyone stealing it would be doing me (or rather Vodacom!) a favour. In any case, I have tons of old phones lying around which I could always use in emergencies.
- Weigh the cost of the item up against what it’s going to cost to insure the item.
Spending R100 a month to insure a R3, 000 camera which you only use once a year is surely a waste?
- When last did this item leave the home?
If you can’t remember when last then you’ve answered your own question.
- What’s the chance of losing this item or having it damaged?
Slim to none? Then why bother?
I think that’s enough for today. In the next article I’ll discuss what will get paid if you claim under the all risks insurance section. If you can recall I discussed ‘average’ in the “Why should I insure my home for replacement rather than market value” and the “Should I insure my house contents for actual or replacement value” article.
We’ll find out whether the same thing applies to all risks next week…
Until later folks!
Related posts:
- Short And Long Term Insurance. What’s The Difference?
- Is Short Term Insurance Really The Evil Twin Sister?
- Car And Home Insurance | Are You Insured For Both Theft And Burglary?
- Is Your Vehicle Insured At The Correct Value?
- Should I Insure my Household Contents For Actual Or Replacement Value?
Article by Lawrence
Someone, who as he gets older, finds he has more questions than answers
Lawrence has written 150 awesome articles for us at Insurance Fundi
