If you are a buyer of assets you probably have come across the term ‘short-term insurance’ while trying to protect one of your assets from theft, damage or accidents. Short-term insurance plays an integral role in the insurance sphere in South Africa.
The reason why short-term plays an important role in our everyday life is because of the level of crime in South Africa. South Africa reported 220 000 home burglaries in the year 2019 and 48 100 stolen cars during the same year.
It is clear that your valuable assets are at risk and must be protected from theft, damage and accidents.
What is short-term insurance
Short-term insurance is an insurance policy that can be purchased for a short period of time. This is meant to meet the temporary insurance needs of the insurance buyer.
In short, short – term insurance is all types of insurance policies other than life insurance.
Short-term insurance includes cover for property, personal liability, portable possessions, business insurance, travel insurance and vehicle insurance.
How does it work?
Just like Life insurance, short-term insurance also requires examination of the asset(s) or what is going to be insured.
Premiums vary per customer. For example, those with more driving experience, older and with better anti-theft devices will pay low premiums than those who are younger, having less driving experience and with little or no anti-theft devices.
Anything that an insurance company is insuring will be named in detail on the insurance contract.
You should not make assumptions on what the insurance covers. The words ‘comprehensive insurance’ have a lot of overestimated assurance to most insurance buyers.
Just because it’s ‘comprehensive’ it doesn’t mean it covers everything regarding your motor vehicle.
Your risk profile will determine the monthly premiums that you will pay. The higher your risk profile is the higher your premiums will be. Over time, you can renegotiate your premiums for better rates.
Who should purchase it?
Short-term insurance is not something that many consider when buying assets. In many cases, many are forced to take short-term insurance so that lenders can protect their issued loans through insurance.
Short-term insurance works in the holder’s advantage because of the unforeseen circumstances that can take place in one’s life.
You can lose your job or get involved in an accident. If you are out of employment due to health issues and have insurance, that insurance can cover you from the time you lose your job to the time you get a new job.
Travellers, employees, business owners, businesses, etc can get it.
The list literally includes everyone, everyone needs to get a short-term insurance, at least at a certain point in their lives.
What causes short term insurance policy invalidation?
There are a number of things that policyholders do that invalidates their claims.
The policyholder can do things that trigger the insurer to cancel or refuse to pay out a claim. You need to avoid these so that you can keep your short-term insurance cover.
- Failure to update the risk address.
- Inability to provide correct or providing incorrect details about a motor vehicle regular driver under a motor insurance policy.
- Failure to declare that you are conducting business at your home. If you are conducting business at home, you need to declare this to the insurer.
- Improvements on a motor vehicle or home that are not part of the cover of an insurance policy.
- Exaggeration on losses incurred.
Avoid all these five mistakes that many make. The most common problem that many face is that they exaggerate their overall loss.
Exaggeration of losses is a common type of fraud. The insurer can easily pick exaggerations.
How to handle claims for short-term insurance
The insurance agreement outlines everything that the insurer covers on your insurance policy in the events that might happen.
Since the insurer specifies what they cover, should that event take place you will then have to make a claim.
For example, if your cover is for comprehensive motor vehicle insurance, should third party damage your car, you will need to make a claim.
Claiming simply means getting in touch with your insurer and provide evidence of what took place.
After claiming, your insurer will require you to pay the excess of the cover amount.
The amount will be a small amount. To avoid paying an extra amount on your claim, you will have to take a Gap Cover that will cover the difference between what the insurer will pay and the total amount.
If you have taken a home contents insurance, you will need to specify every content to the insurer.
When buying new items at home make sure that you report them to the insurer.
If you don’t report them to the insurer, the insurer will not pay out should they go missing. However, insurance companies make exceptions on the possessions of visitors.
List of companies providing short-term insurance in South Africa
There are many short-term insurance companies in South Africa. This is because it’s easier to register a short-term insurance company as compared to a life insurance company.
Therefore, locating a short-term insurance company is much easier.
Here is a list of short-term insurance providers in South Africa:
- ABSA Insurance Company Limited
- AIG South Africa
- Alexander Forbes Group
- Compass Insurance company
- Constantia Insurance Company
- Customer Protection Insurance Company Limited
- Emerald Insurance Company
- Guardrisk Insurance Company
- Hollard Insurance Company
- King Price Insurance
- Lion of Africa Insurance Company
- MiWay Insurance Company
- McSure Limited
- Monarch Insurance Company
- Mutual and Federal Insurance company
- National Insurers limited
- New National Assurance Company Limited
- Nova Risk Insurance Company Limited
- OUTsurance Insurance Company Limited
- Pinnafrica Insurance Company Limited
- Regent Insurance Company Limited
- Santam Ltd
- Standard Insurance
- Stanbic Insurance Limited
- Unitrans Insurance Company Limited
- XL Insurance Company Limited
- Zurich Insurance Company Limited
- Budget Insurance
- Auto and General
- 1Life direct
- Dial direct
It is the best insurance for those who want to maintain their lifestyle.
You can protect your assets or income or yourself from personal liability with Short-term insurance.
The benefits are great and there are many companies that are open to cover you or your assets.