Guiding consumers since 2009

Be informed when insuring

By Staff Writer

Santie Stevens, an insurance broker at InsuranceBusters(FSP No: 32984, an Authorised financial provider) says: "When it comes to buying a product that needs insurance, consumers are often overwhelmed by all the paperwork and legal terms, that they simply sign without really understanding what they are buying."

South Africans must not feel pressurised into buying insurance without considering all of their options, knowing what they really need and fully understanding the various policies.

Stevens adds "The problem is that the insurance may be included in your payment contract automatically. For example, customers should have the option of insuring furniture under their own household insurance policy (which may be a cheaper bet). If you have comprehensive household insurance you will need to provide proof to the store that you have taken out insurance. The cost of insurance through a furniture dealer can be very costly as you are paying insurance for the item only and will pay this insurance for the contract term. To add insult to injury, you will pay interest on this insurance cost as the furniture stores pays the insurance upfront and they are entitled to charge you interest."

"If you have a household insurance policy, include your purchase in your policy so you will not have to pay the store for insurance. Do an inventory of all your contents at least once a year. Remember to take into consideration the contents in your outer buildings and garage. The inventory must be done on old for new prices because average is applicable. Another important item to remember is the excess you will pay should something happen to the item purchased. On a standard Home Contents insurance policy some insurers have a nil excess whereby the furniture stores may have rather high excess. Always compare the excesses between various insurance companies, for some insurer will increase the basic excess to decrease the monthly premium."

"Most importantly make sure you read the fine print on the sales agreement. People rush through the paper work without acknowledging what the contents entail."

She provides the following advice:

  • Always make sure you receive a copy of the policy document
  • Make sure that you understand every detail about the policy, and ask as many questions as you need to.
  • If you feel that your questions are not being answered, contact your insurance broker for professional advice.
  • If you ever have any reservations about a financial services provider, check to see if they are registered with the Financial Services Board.
  • Always remember that according to the National Credit Act, you are under no obligation to use the insurance company offered by the product seller.

Finally, Stevens adds that insurance is supposed to be there as your safety net and providing peace of mind, not as an added unnecessary expense. Make sure that your needs are met by being precise and communicating properly with your insurance company.

Recent Articles

Featured How are you taxed on your retrenchment package?

Unemployment is one of the biggest problems in South Africa. The emergence of the Covid-19 pandemic has exacerbated the situation with a lot of companies retrenching their employees.  When retrenched, you’ll receive a retrenchment package, but do you know how much tax you’re liable for?

Car repossessed – don’t be taken for a ride

When the country is facing an economic downturn, chances are your finances will feel the pinch. This can lead you to make bad financial decisions such as skipping your vehicle payments. But every decision has consequences and if you don’t pay your instalment, the bank will repossess your car. But what can you do when this happens?

 

Why you should consider gap cover

Your medical aid should protect you from incurring large medical bills when you’re sick. But what if your plan doesn’t cover the full cost of your medical expenses? We got in touch with insurance experts to find out whether gap cover is worth having.

Debt relief - What is your bank offering?

Going through a financial crisis is stressful whether it be as a result of losing your job, being short-paid, having to fork out towards an emergency payment, or finding yourself in the midst of a global pandemic. This is especially taxing if you have a debt to service. It is against this backdrop that banks are increasingly offering payment holidays. Justmoney looks at the various debt relief options available to you from the big five banks.

Deals

Office furniture at discounted prices at BDK

Price: Available on request
When: Daily
Where: Johannesburg

Da Vincis Happy Hour Special

Price: Available on request
When: Daily
Where: Cape Town

Use your Absa card and get 30% cashback at Dis-chem

Price: Available on request
When: Daily
Where: Nationwide


Latest Guide

Guide to debt rehabilitation solutions