Make your insurance work harder for you

With the spotlight falling on workers in South Africa in May, we're looking at how hard-working citizens can make their short-term insurance work harder for them.

As a starting point, it's useful to know the difference between short- and long-term insurance.

Short-term insurance covers everyday items, like your home, home contents, car and high-value items like cellphones and jewellery. You normally update these policies frequently, like when you buy a new flat screen TV, move home, upgrade your vehicle's security or get a new phone.

Long-term insurance covers you personally - your physical body, your health and your ability to earn an income. This typically includes life insurance, income protection, dread disease or disability insurance, and funeral policies. This cover is not updated that often.

Times are tough, so do you really need all this insurance? The short answer is yes.

Insurance works by you paying a small fee every month to an insurance company that in turn covers the cost of repairing or replacing an insured item should it be damaged or stolen.

Take your car, for instance. The R450 per month you pay for vehicle insurance could seem like a lot, but it's a drop in the ocean compared to the cost of replacing your vehicle should it be stolen.

While insurance is a must-have, you can make budget-friendly choices to ensure it remains affordable.

Take a look at the below to assist you:

Vehicle insurance

• Comprehensive cover is complete cover for anything that could happen to your vehicle, from an accident to theft, hijacking or damage caused by bad weather (like hail or a falling tree in a storm).
• Basic vehicle insurance just covers your vehicle if it is stolen or damaged by fire.
• Third-party insurance covers you for the damage caused to another vehicle in an incident or accident that was your fault.

If you can't afford comprehensive insurance, consider basic or third-party cover.

Home insurance

• Home owners insurance covers your actual house as well as your property (erf), garage and outbuildings. This insurance covers the physical structure of these buildings and land from damages such as floods, fire, wind, hail, lightning or a loss of structural integrity.
• Home contents insurance is the cover that protects you from damages or theft to your personal belongings inside your home - your appliances, equipment, furniture etc.

If you can't afford both types of cover, go for home owners insurance (that covers the cost to rebuild or repair your home) and beef up your home security to protect your belongings, or add a small home contents insurance policy to cover a few essential items.

Out and about insurance

• Comprehensive 'out and about' insurance covers your personal belongings that can be stolen or damaged while you are outside your home. A comprehensive policy would cover all your portable possessions.
• Specified 'out and about' cover only covers those items that you specifically want to cover. This cover has itemised amounts for each insured item.

If you can't afford all-risk cover for your portable possessions, only cover your most valued items that leave the house often, like your wedding rings, phone and laptop.

Don't forget, Reliance can help you tailor your short-term insurance policies to suit your lifestyle and your budget.