A recent article in Risk Africa magazine highlighted the need for short-term insurance advice and where one should go to get this advice. The article highlighted the greater demand for short-term insurance in South Africa with a 34% increase in the number of vehicles on the road between 2007 and 2013 and a higher proportion of the population moving into Living Standard Measure (LSM) 6-12.

One needs advice on how best to insure their assets to ensure that they are adequately covered in the event of a financial loss. A recent Discovery Insure study of data showed that 66% of clients who completed an inventory were on average R1million under-insured. The problem is that most insure their assets for the purchase price and not the replacement value.

Whilst some “High Net Worth Individual” insurers appoint a valuation expert to assist in determining a value. Most do not, and this leaves you with the daunting task of establishing a value yourself. Have you ever thought that if your house burnt down to the ground what you would need to replace everything you own. It may surprise you to know that an average family of four accumulates between R200,000 and R300,000 in clothing and linen alone at any one time. Add it all up correctly and you will see how under insured you actually are.

When it comes to property, most insure their house for what they paid for it. Try rebuilding it, the cost will be much higher than the purchase price.

A DIY valuation will give you a ‘guesstimate’ replacement cost. It is best however, too – in conjunction with your advisor to have a professional valuation done, this becomes an ‘agreed value’ and removes the risk of under-insurance.

You would not tackle the legal system without a lawyer, don’t tackle insurance without a broker.