Tackling the tough economy
IN light of South Africa’s recent downgrade to junk status, many analysts are warning we need to tighten our belts and prepare for tougher economic times.
Looking at your insurance and ways you can save at home are good places to start.
Avoiding having to claim on insurance helps keep your premiums down and provides you with a noclaim bonus if you have such a facility on your policy.
Great tips to try at home include turning off electrical points and appliances when they are not in use.
This will save on electricity costs, which helps your pocket a little and reduces risks of appliances or cables shorting and causing a fire, for example.
If you have a leaking tap, or any other leaks around the house, have them repaired.
You will be saving on water costs, as well as repair costs down the line, particularly if the leak is coming from the roof and affecting the walls.
Remember that for insurance purposes, your roof has to be maintained so that you will be covered.
It is worthwhile having leaks detected and sorted out as soon as possible.
If you were thinking of buying a new car this year, it might be best to wait it out a little.
New cars, or even those that are second hand, may incur high repayment costs. A newer model of vehicle will also generally attract a higher insurance premium.
If you can, maintain your vehicle to keep it in line with your present insurance cover, making sure you have regular services (usually once a year, or every 10-15 000km, or depending on your vehicle’s specifics) and that your tyres have the right tread on them (no less than 1.6mm legally).
You can also reduce your sum insured value on your existing vehicle, which may also reduce your premium.
Unfortunately, as the exchange rate fluctuates, so does the value of all the goods in your home that are imported.
Chances are that items from your television to your porcelain tiles would cost more to replace today than when you bought or installed them, and they need to be sufficiently covered by insurance.
It would be worthwhile re-evaluating your contents and increasing your cover accordingly. Being underinsured will be costly, should you need to claim.
If you are underinsured your claim may be repudiated altogether, or will only be paid out proportionately.
What this means is that if your contents value is actually closer to R500 000, and you have only insured for R250 000, your insurer may only pay out 50% of R250 000, which would be very difficult for you financially.