Mitigate risk by expecting the unexpected
January 2010While the average homeowner may think that they are well-protected should an unforeseen catastrophe strike, no one can predict the future and, it's better to be safe than sorry.
Keeping in mind the excessive rain and consequent flooding that has devastated many farming communities in the country, it becomes all the more vital to be on top of two easily manageable household chores: ensuring that all insurance records are up to date and easily accessible, and creating a fund for emergency situations.
Know what your insurance covers
"In terms of insurance, Budget Insurance Brokers sometimes finds that clients are not adequately prepared for insurance claims," says Martin Janse Van Rensburg, spokesperson for Budget Insurance Brokers.
He adds: "Some don't keep good records of their possessions and do not check their insurance policies properly to make sure they have adequate and suitable cover in place."
There is no better time than now to make sure that your home contents, buildings and vehicle insurance policies are in order. You can do so by:
- Keeping copies of your life, car, home contents and buildings policies with your home inventory in a safe location away from your home, so that these records can be easily retrieved in the event of a loss.
- Keep a list of contact details for your insurance company handy.
Build an emergency savings fund
An emergency savings fund of about three to six months of living expenses is a lifeline that could prevent many a sleepless night.
Ensuring that you have resources that you can dip into to pay the SA Revenue Service, your home loan should the interest rate increase, the excess payable for home renovations as a result of a geyser bursting, for example, or medical bills, means that you will never be caught short should you experience an unexpected set-back. "The ideal place for emergency savings is a savings account, initially, as you start to build up reserves," advises Janse Van Rensburg.
However, he notes that as the sum of money grows, it is best to find an account that will earn reasonable interest and which is also convenient in terms of quick access to the money for if or when you need it.
"Bear in mind that accumulating even just one month's worth of savings will take some time; however, if you set small, manageable goals, like R50 a week, you will have a better chance of achieving them," says Janse Van Rensburg.
Learn what to do before and after a disaster
By taking pre-emptive action, you can mitigate your exposure to certain types of disaster. For example, in areas that are prone to flooding or fire, make sure that your home contents and buildings policy covers your home for losses due to these disasters.
"Ask yourself: 'If disaster struck my home today, would I know or have records of what I owned and lost?' Keeping an inventory list is extremely valuable, as is insuring your home contents for their replacement value," advises Janse Van Rensburg.
Janse Van Rensburg concludes: "Set aside some time to detail all your belongings. An accurate, up-to-date inventory list can make all the difference when filing an insurance claim, especially when you need to focus on recovering from the shock of the ordeal, rather than on trying to remember what you lost."
