Adjusting Short Term Insurance Policies

October 20 - While the worst of the recession may be behind us, South African consumers are still cash-strapped and looking for any way to save their precious rands.

Many consumers believe that cutting back on their monthly insurance premiums is a good idea in a bid to save money, but in the long run, this could compromise very important cover in the future.

First National Bank Insurance Brokers advise South Africans that savings in short term insurance can be secured in a number of ways.

However, it is imperative that any changes be made with the advice of professionals.

The General Manager of Marketing for FNBIB, Debbie Barret said: "Savings can often be made by adjusting the sum insured and the extent and nature of cover."

"Efficiency like this can be achieved by securing a closer fit with the lifestyle of the policyholder or through closer alignment with an individual's risk profile," she said. "Furthermore, in areas like motor insurance, savings on premiums can be secured by accepting a higher level of excess. In addition, fully comprehensive motor cover might not be necessary in all cases - another area of potential saving."

Barret reiterated that specialist advice from a qualified broker is of the essence "to ensure cost savings do not result in an unacceptable level of risk exposure."

It is not uncommon for policyholders to think they are saving a few hundred rand in the first few months, only to find themselves highly exposed in the future.

Other ways to saving on short term insurance include taking advantages of special rates for special categories, such as seniors, for example.

Also, consolidating a number of policies with the same insurance group may also bring special discounts.