How to navigate the insurance landscape in 2024

The future is not as predictable as it used to be with climate change causing unbelievable damage due to storms and other weather events and cyber and physical crimes becoming more prevalent.

Therefore, consumers should ensure now, at the beginning of the new year, that their insurance cover adequately protects them against emerging risks, Sandro Geyser, MD at IntegriSure Brokers, says.

Geyser says there are five factors consumers must consider when reviewing their motor and home insurance policies: power surges due to load shedding, cybercrimes, underinsurance, the financial risk when it comes to excess payments and risk mitigating services.

Power surge cover and load shedding protection

South Africans had a challenging year where they endured over 330 days of load shedding in 2023, indicating a significant escalation in the country’s power supply crisis, Geyser says. “In line with the frequency of unexpected power surges and load shedding in 2023, most insurers implemented significant changes to enhance their approach to power surge cover.”

These changes included revised excess structures, policy wording changes, inclusion of definitions outlining what constitutes a power surge, optional cover and limits and in some instances, the inclusion of waiting periods for new cover.

“It is therefore important to familiarise yourself with the policy conditions for your power surge cover and understand the extent of cover you will enjoy during load shedding.”

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Cyber insurance to safeguard against rising threats

In an era marked by escalating cyber threats, South Africa has become a primary target for ransomware and e-mail attacks. According to Surfshark’s Data Vulnerability Thermometer research, South Africa’s cyber-crime density, the percentage of cyber-crime victims among a specific number of internet users, increased by 8% over the past year, placing the country in fifth position globally.

Phishing and online payment fraud remain the most prevalent cyber-crimes worldwide and therefore, Geyser emphasises the importance of integrating cyber cover into insurance portfolios.

“We all know of someone who was hacked or lost money to cyber criminals. Many consumers are unaware that they can obtain insurance cover for themselves and their family against cybercrime on an individual basis.”

He says in line with the shifting cybersecurity risk landscape, cyber cover is not only essential but also affordable, and should form a crucial part of your comprehensive insurance portfolio.

The silent risk of underinsurance

Geyser warns consumers against underinsurance and urges policyholders to annually review cover values to prevent being underinsured.

The potential consequences are stark: a failure to increase your contents cover by a very reasonable 10% annually could result in a massive 61% underinsurance after just five years.

“The additional premium to accommodate for only a 10% increase in value is minimal. Also, do not forget to insure any new items purchased over the festive season are added to your cover.”

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Understanding the risks of excess structure

It is important to know how much excess you have to pay on your policies, Geyser says.

“All too often a cheaper premium comes with higher excesses. Going from a zero excess on your vehicle to a R20 000 excess can easily result in a 40% change in premium. You can adjust most policy excesses and they remain an excellent tool to manage your risk depending on your personal circumstances and budget.”

Risk mitigating services: beyond conventional cover

Understanding and managing insurance risks is complex. “Different risks require distinct insurance products and understanding each policy’s nuances is crucial for adequate protection,” Geyser warns.

“As risks evolve, regularly review and update your strategy and cover to align with your current situation. Collaborate with an experienced insurance broker to help navigate policy complexities to ensure proper protection.”

Brokers should also play a key role in identifying and supporting non-traditional risk management solutions, incorporating elements like risk prediction and prevention.

After ensuring that your short-term insurance cover is adequate, Geyser says it is also a good idea to review product options.