Short Term Insurance Alignment Encouraged

May 5 - BJM Insurance Brokers warned South Africans this week that they may be losing out on millions of rands by not having their insurance policies properly aligned.

According to the risk group, South Africans can save up to 15% a year by better aligning their risk and cover for short term insurance.

"For better off South Africans, this runs into saving thousands of rands a year on short term insurance," noted the Chief Executive Officer of BJM Insurance Brokers, Willem Coetzee.

The idea is to assess risks in more realistic way in order to achieve insurance protection that suits the real risks faced by the policy holder and his or her family.

A higher price will be paid if payments are made according to insurance company actuaries who analyze probabilities but fail to check out the policy holder's real risks.

Coetzee said that savings could be quite substantial when consumers take the time to shop around in order to find the right kind of aligned cover.

"A potential saving of 15% is by no means unusual, he said. "Insurance policies define the perils against which you can insure. To a varying degree, you then have the option of selecting from available covers."

"By matching covers with the risks you wish to insure, you get value for money from your insurance policy," he added. "This and the avoidance of circumstances that expose your assets to loss or damage will reduce the cost of insurance."

"In view of continuing pressure on consumers, it is surprising that risk reviews like this are not carried out more frequently," concluded Coetzee. "Savings across the insurance industry could run into tens of millions of rands every month.