Simplifying Insurance Language
At dotsure.co.za, we're dedicated to making insurance simple and straightforward for our clients. Below, we break down some common insurance terms, to help you to understand the essentials of your policy and how to make the best choices for your needs.
Commercial Use
Commercial use refers to using your property (such as a vehicle or other equipment) for business purposes. Always refer to your policy document to understand what is permitted under your coverage and whether any specific conditions or exclusions apply.
Credit Shortfall Insurance
When financing a vehicle, the loan's accrued interest in the first few years can mean the insured value is less than what you owe the bank if the vehicle is written off. Credit shortfall insurance can cover this gap, ensuring that you are not left paying out-of-pocket for the shortfall between the bank loan and your insurance settlement.
Excess
An excess, or deductible, is the portion of a claim you are responsible for paying. Be cautious of policies with low premiums but high excesses.
Exclusions
Exclusions are specific items, losses, or events not covered by your policy. These are clearly specified in your policy wording, so it is essential to read your policy carefully to understand what is and isn’t covered.
Extensions
An extension is additional coverage or benefits that can be added to your policy, sometimes at an extra premium. These add-ons enhance your coverage and provide extra protection tailored to your specific needs.
“Held Liable”
You are held liable (responsible) if someone proves that you caused injury, loss, or damage unlawfully, whether deliberately or accidentally (negligently). Liability insurance can protect you in such cases, covering the costs associated with these claims.
Indemnity
Indemnity is the core principle of most insurance policies. It aims to place you, as far as possible, in the same financial position you were in before the loss occurred. Depending on the policy, this could involve repair, replacement, reinstatement, or a cash payout.
Pro-Rata Premium
A pro-rata premium is a portion of the full premium you pay if you are only covered for a part of the period. For example, if you require cover from April 20, you will be charged a pro-rata premium for the 10 days from April 20 to April 30. After that, you will pay the full monthly premium.
Replacement Cost
Replacement cost is the amount required to replace or rebuild an item of similar quality using current materials and goods. It's important to insure your home or valuable items for their replacement cost rather than their original purchase price to avoid financial shortfalls in case of a total loss.
Safety Measures
Your policy may require specific security measures, such as burglar bars on windows and doors, a vehicle tracking device, or an armed alarm system when you're not at home. Ensure you meet these requirements to keep your coverage valid.
Sum Insured
The sum insured is the maximum amount your insurer will pay for insured property in the event of a valid claim. Ensuring this amount is adequate to cover potential losses is crucial to avoid being under-insured.
Valuation
Valuation involves assessing the financial worth of an item or asset. For appreciating assets, update your valuation certificates annually and insure them for their current replacement value.
Wear and Tear
Insurance covers sudden, unforeseen circumstances, not damage due to negligence or wear and tear. Examples include rising damp, unattended water leaks, or smooth tyres. Regular maintenance is crucial to avoid claim rejections.
We at dotsure.co.za, are here to make insurance easy to understand and manage, ensuring that you have the coverage you need without the hassle.
