Every day you take actions to protect yourself, your loved ones and possessions. If the morning is overcast, you grab your raincoat on the way out. You buy your child a helmet along with her first bicycle. Getting short-term insurance is pretty much the same thing, just taken a step further.
You pay an insurance company a regular amount, called a premium, to cover you against setbacks. How much you pay, depends on what you insure and the risk it will be exposed to. If anything you insured is damaged, lost or destroyed, your insurer will replace it or pay for repairs.
Short-term insurance comes in different packages. Motor vehicle insurance pays out an agreed amount if your car is stolen, damaged or destroyed. Just be sure to check and update the current value of your car regularly.
There are a number of options.
Comprehensive insurance is full cover that pays the insured value of your car. Balance of third party (fire and theft) pays if your car burns or is stolen and if you damage someone else’s car or property. Third-party cover is for damage you cause to someone else’s vehicle.
Household contents insurance covers everything in your home.
And homeowner’s insurance which covers the structure of your house – usually equal to how much rebuilding it would cost.
If someone sues you for damages, like a postman bitten by your dog, personal liability insurance will pay. All-risks insurance protects items you could lose away from home. Personal accident insurance is for you or family members who are disabled or die in an accident.
You can buy insurance from an insurer or through a specialist like a broker who will give you advice and quotes from various companies. Either way, be honest and accurate. If not, you might end up with a rejected claim. Insure for less than the real value of anything and the insurer might pay out only a percentage of your cover.
Pay premiums promptly so your policy doesn’t get cancelled. Keep them down or get them reduced by increasing your excess, the amount you’re willing to pay yourself. Improve your home security – less risk means lower premiums.
If you have to claim, do it as soon as you can and report accidents or crimes, like a robbery, within 24 hours.
There’s a lot to consider before you insure. An Old Mutual adviser has the expertise to help you get the best possible cover. Talk to one today.
Short-term insurance is like a financial blanket that keeps you protected. Now that you're familiar with the different types of insurance, it's time to find the right cover for you.