SA youth can be forgiven for focusing on about getting their career started and enjoying their independence rather than thinking about insurance.
However, young people own some of the most expensive products on the market such as cell phones, cameras, and motor vehicles so insuring these products can be beneficial in the long run.
For Youth Month, the Ombudsman for Short-Term Insurance (OSTI) has put together a few insurance tips.
Insure your valuables
The importance of insurance is often only realised when an item has been lost or damaged. Short-term insurance will provide you with financial security against unforeseen damage to, or loss of, valuables.
Provide accurate information
People need to answer questions asked by insurers during the underwriting/sale of the policy to assess and price your risk.
If people don’t answer the questions truthfully, the insurer may not only reject a claim but also cancel the policy with effect from the start date. If an insurer cancels your policy, it may be difficult to obtain cover from other insurance companies.
Insurers conduct detailed investigations when validating a claim and if any misrepresentations are revealed during the process, the claim may be rejected on the basis of a material misrepresentation.
Evaluate your personal needs and financial standing
Choosing the best cover does not necessarily mean finding a policy with the cheapest premium. Instead, get insurance that is tailor-made to meet your needs and budget. Having insurance means that you have to consistently manage your income and expenses to ensure that the premium is paid on time.
If the insurance premium is not paid, the policy will lapse, which can impact your insurance risk profile.
Remember that your insurance needs will change as your life and career develop so it is important to review your insurance regularly.
Premium reversals
You will not have cover if you reverse an insurance premium after it was successfully collected from your bank account by the insurer. Premium reversal may even result in the immediate cancellation of the policy.
Contact your insurer to see if any arrangements can be made if you are experiencing financial difficulties.
Read the policy documents
The insurer does not have an open-ended liability to compensate you for any loss or damage suffered. They are liable if the claim falls within the scope of the cover provided in the policy documents. It is important to read and understand the terms and conditions of the policy.
Be overly inquisitive about your cover
Ask your insurer or broker to explain the exclusions of the cover and any obligations you may have under the policy.
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