You’re paying for insurance. You may as well use it, right?
I agree, and that’s only because I’m one of the worst claimers. After all, the reason we take out car and home insurance is to indemnify us against loss or damage, right?
The insurer must place you in the same position as you were before. In other words, they must either repair or replace your property.
The only reason why I’m still insured is because I submit claims where I have suffered substantial loss. Losing a car worth R80, 000 is a substantial loss. Claiming for a five year old cellphone worth R500 isn’t?
Why it isn’t wise to claim for every little thing?
Car and home insurance is the one type of insurance which isn’t guaranteed. In other words, they are entitled to cancel your insurance or increase your cost.
Life insurance on the other hand doesn’t allow them to cancel your policy if you claim to often.
Insurance companies are excellent accountants. The only way to keep head above water is for them to keep track of how much you pay them versus how much they pay you.
If you pay them more than they pay you, then you should be rewarded for that. Speak to your broker or call the insurance company and kick up a stink. By the way, do this first before shopping around for a better deal.
If they pay you too much then they will do one of three things:
- Increase your cost (This isn’t ideal because it’s an incentive for you to claim even more).
- Increase your excess, or
- Cancel your insurance (last resort)
But it’s important to know this…
Certain claims don’t count against you. Here’s an example:
Claiming for contents of your fridge because of a power outage might not impact your claims history.
The best thing to do before claiming is to ask your insurer or broker for advice.
What are your thoughts on this?
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Until next time.
The InsuranceFundi Team