Young people today walk out the door with expensive items without realising the financial consequences if something goes wrong, according to Molebatsi Langa, head of retail strategic accounts at Old Mutual Insure.
Langa emphasises that without adequate insurance coverage to cover any incidents such as theft, young individuals could be significantly out of pocket.
Here are six essential insurance insights for young people:
Insurance must-haves
Nowadays young people carry around items that are often more valuable than items that are in their homes. This means that, all-risk cover, which provides insurance for valuables like cellphones, earbuds cameras, and laptops, regardless of location, is a must have.
If you are driving a car that your parents bought for you or you paid for yourself, car insurance is a must. Similarly, household insurance to cover all your other possessions is a must.
Honesty is the best policy
Always answer questions form your insurance provider truthfully or you will run the risk of having your claim rejected or policy cancelled.
“Remember that the policy is assessed based on your risk profile, which is determined by the answers you provide to your insurer when setting up the policy,” Langa said.
Insurers conduct thorough investigations when validating a claim and if any misrepresentations are revealed during the process, then the insurance company may reject your claim. This may also make it difficult to obtain coverage from other insurer.
Don’t opt for the cheapest premium if you can’t afford a higher excess
Young people may make the mistake of choosing a lower monthly premium for a policy without realising that they will have to pay a high excess in the event of putting in a claim.
Remember, choosing a higher excess will result in a lower monthly premium, while a lower excess will lead to a higher monthly premium.
Langa said that it is critical that young people carefully consider their options before making a final decision.
Read the policy documents
If you are taking out your own insurance contract, you need to understand that it comes with responsibility.
“An insurance contract means there are two parties who have a responsibility. The insurer has the responsibility of handling your legitimate claim and putting you back into the same position that you were before the loss,” Langa said.
Your responsibility, as the policyholder, is to understand the terms and conditions of your insurance policy.
Speak to your insurance broker if you are unsure about anything so you know exactly what you are signing up for.
A common misconception
People think insurance is a one-size-fits-all cover, instead insurance premiums vary based on risk factors, such as vehicle type, colour, and driver's profile. Your risk profile as an individual is also considered.
Choose products and insurers that suit your lifestyle
Many young people believe that acquiring insurance or putting in a claim is a tedious, time-consuming process filled with endless paperwork.
However, in today's world, many insurance providers have developed platforms that streamline the sign-up and claims procedures.
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