Why being underinsured sucks

The whole point of buying insurance is to protect yourself from financial loss in case your stuff (like your car, the stuff your carry on you all day, the things in your house, and even your house itself) gets damaged or stolen.

Because you can’t physically see the protection that your insurance policy provides*, it can be tempting to look for ways to cut corners and insure less, so you can pay less.

But doing this might leave you underinsured and overexposed. (Not like that. This is a family blog.)

Being underinsured at home

Use King Price’s handy inventory form to make sure you’ve accounted for everything that you need to include in your home contents policy. You really want to make sure you cover everything, because here’s the thing: If the value of your home contents is less than what you’ve insured them for, you’re going to have a bad time when you have to claim.

You see, if the value of your stuff comes to R100 000, and you only insure it for R50 000, then you’re underinsured because you’ve only insured 50% of your stuff.

This means that any insurer (not just the king), will only cover you for only 50% of your claim…. Which means you’ll only get paid out R25 000 for all of your stuff….

And that sucks, right?

Being underinsured on the road

There are all kinds of ways to bring your monthly car insurance premium down (and signing up for King Price is one of them), but not every compromise you make now will pay off in the long term.

If you want the damage to your own car to be covered, make sure you opt for comprehensive insurance, and not the cheaper third party only option. A higher excess will help you bring your premiums down more- but remember, you might have to pay that amount some day, so pick a figure that won’t break the bank.

All of those extra options, like hail cover, car hire and the king’s cab might also seem like luxuries now, but anyone who’s had their car whacked by a cricket-ball sized hailstone during a Highveld thunder storm will tell you that the extra cover is definitely worth it.

Playing it safe and still saving money? That definitely doesn’t suck.

Are you worried now that you may be underinsured? Then drop us an email and let’s have a look at your policy just to make sure, [email protected].

Not a King Price client yet? To fix that right away, call us for a quote on 0860 00 98 72.

*If you can, you might have superpowers and you should probably get that checked out.