Over the past year, the world as we know it has completely changed. Spare rooms have become work stations and dining tables have doubled as classroom desks; masks are the new fashion accessories and the phrase “You’re on mute” is part of our standard vocabulary. It has been a time of great adjustment, hardship and uncertainty—but the slower, quieter pace of life has also brought with it a chance to reflect on the things we really care about.
Globally there is a shift towards a less cluttered, simpler way of living with a focus on core human needs such as wellbeing, financial security and family. Beyond its new role as a makeshift office, home has become our comforting and even more meaningful safe space.
The pandemic has taught us what we can live through—and what we can’t live without. That is why it has never been more important to ask the question: “How do I preserve the things that matter most?”
This is where personal insurance has a key role to play. A comprehensive insurance policy provides much-needed peace of mind; ensuring that you and your loved ones are protected against the unexpected.
In this document we unpack in simple terms, the biggest current risks and share guidance on how to reduce their impact. At Shomang we believe that the more you understand risk today, the better prepared you are for the future.
Retrenchments, pay-cuts and wage freezes have become all too common. With vaccine rollout programmes in place, a sense of optimism is creeping back, but it will still be months before we are able to return to economic stability.
As a result, people have cut back on spending in almost all categories. Because many see it as a ‘grudge purchase’, short-term insurance often falls prey to these cost-cutting exercises. It can be difficult to see the true value of paying a monthly premium on something that offers no instant rewards, and therefore people often make the mistake of putting policies on hold for a time.
The thing with insurance is that you don’t need it until you really need it. As the well-known investor Warren Buffet said, “It’s only when the tide goes out that you learn who has been swimming naked.” He was referring to companies borrowing too much money during good times, but this is equally relevant when it comes to personal insurance. Accidents don’t wait for a convenient time and being ‘caught without cover’ can leave your family and valued possessions in a vulnerable position.
While this makes sense, we know it’s easier said than done—especially in tough times when budgets are tight. So, what can you do? Here are a few practical suggestions:
Being insured is one thing but it is equally vital to be insured correctly. It is estimated that one in three homes in South Africa are underinsured, and these statiatics are increasing annually.
But what exactly does it mean to be underinsured?
When the amount you are insured for is less than the value of your items, you end up having to pay the difference (also known as the shortfall).
For example: your household goods are insured for R200k but they are worth R300k. In the unfortunate event that they get stolen, you will only be paid out R200k. Should you want to replace the stolen items, you’ll have to cover the R100k shortfall.
Being underinsured can place unnecessary financial stress on households and often leave people unable to replace the valuable possessions they’ve worked so hard for.
How to avoid this risk:
From devastating heatwaves and wildfires to freak storms and flooding, extreme weather patterns have become more common. While we cannot control the weather, it’s important to be aware of changes to your environment and do what you can to protect your home from growing climate change risks.
Together with your personal insurance policy, there are a number of other precautions you can take to protect what matters most. They may seem like simple actions, but they can make a surprisingly big difference to your security and financial wellbeing.
The added benefit of these actions is that they often result in a reduced insurance premium. They also lessen your chance of claiming and therefore keep your premium low.
A fair number of the above risks can be avoided or better managed by having a broker. The insurance industry is notorious for its technical jargon which can make understanding all the ins-and-outs of a policy rather intimidating. However at Shomang, we believe that insurance doesn’t have to be daunting. With simplicity and service as our cornerstones, our experienced brokers can help you cut through the complexity and provide much-needed clarity. With comprehensive knowledge of insurance products, we can also equip you with the right decision-making tools and advise on the best personal cover for your unique circumstances. This will enable you to preserve what matters most.
Tel: 011 452 4662
 Santam Claims Statics: “One in three South African homes are underinsured by some 30%”
 Santam Insurance Barometer 2019 – https://www.santam.co.za/media/2685167/santam-insurance-barometer-2019-v11.pdf