The big insurance mistake that could put your claims at risk

South Africans with insurance products need to keep their insurers up to date with any life changes that may impact their risk profiles. If they don’t, they may face troubles when trying to make claims.

This is according to Nedbank Insurance Chief Actuary Susan Hunt, who says that even small modifications or changes to your home could alter the terms of insurance coverage.

“It’s essential to remember that when your life changes, your insurance may have to change too,” she said.

“Stay in touch with your insurer and keep them updated on anything that could change your risk profile.”

She said that not keeping an insurer informed can prove costly when it comes to claiming.

If policyholders make changes like adding a patio to their home or some enhancements to their car, it can alter the terms of their insurance coverage.

If they do not notify their insurer, they may find themselves underinsured or not even covered at all.

“Imagine the financial implications of discovering too late that your new home extension, in which you’ve invested so much, is not covered – simply because you didn’t notify your insurer and ask them to update your insurance policy,” Hunt added.

Moreover, failure to update your insurer can lead to greater consequences than simply losing out on some money when you claim: Any future claim can be rejected entirely because it is a potential breach of an insurance agreement.

Thus, it is important to understand the terms and conditions of your insurance policy, and it is the customer’s duty to inform the insurer of any significant life changes.

In addition, notifying an insurer of a change is also useful for checking one’s cover and updating it to fit one’s current situation.

“Like life, insurance is not static. It’s a dynamic contract that needs to evolve as your life progresses constantly. Keeping your insurer in the loop prevents any surprises and allows you to check that your cover is still sufficient if things have changed in your life,” Hunt said.

Hunt said that numerous life changes could affect one’s insurance policies, such as alterations to a property, moving home, buying new household items, changing jobs, or a shift in personal circumstances like marriage, childbirth, or an inheritance.

Importantly, notifying an insurer of changes does not automatically mean that one’s premiums will increase, as some of the changes you make reduce the cost of the insurance.

For instance, telling your insurer that you are upgrading your home security or moving to a safer neighbourhood could improve your risk profile and reduce your premiums.

Even if this is not the case, the insurer can only offer the most suitable coverage for one’s needs if they are fully informed about one’s personal circumstances.

‘It’s valuable to understand that insurance is much more than just a product; it’s a partnership between you and your insurance provider,” said Hunt.

“You must actively participate in keeping your cover in line with your needs. Report any life and circumstance changes as soon as they happen so that your insurance safety net is always in place to protect you when you need it most.”

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