Short term insurance: What can you not live without?

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Cape Town - When taking out short term insurance, look at what you cannot afford to live without, Sharon Paterson, CEO of Infiniti Online, told Fin24 on Monday.

"Times are tough in the South African economy at the moment and people don't have money. The trend we then see in the insurance industry is that they sit back and look at insuring the things they think they might lose, like a cell phone," explained Paterson.

"However, if you do not have a lot of money, I would advise that you should actually look at what you cannot afford to live without. What if you do not have your house insured and it burns down? What if your dog runs in front of a Lamborghini and you do not have insurance? What if a fire started by your gardener to burn rubbish ends up burning down your neighbour's house?"

Another trend seen by Paterson is that people are certainly shopping around. They look carefully at how they spend the money they do have available for insurance.

"You absolutely must have some form of insurance. Unless you are extremely wealthy you cannot afford to pay out if someone sues you. You can, for instance, be liable for damage to someone's property without having done something deliberately," said Paterson.

"Ensure your house and its contents against fire and flooding. Ensure your car at least for third party claims. Get good public liability cover."

For a business she also said insurance against fire, floods, third party and contingency cover (for instance if staff members drive somewhere in their own car on business) should be taken out. One can also insure the business against interruption of operations that causes a decreasing of profit as a result of for example a fire, flood or burglary.

"To be uninsured is a false economy," cautioned Paterson.

READ: How to reduce your insurance premiums

In July Infiniti Insurance launched what they deem to be a pioneering, secure online insurance portal, as opposed to the traditional means of buying insurance.

"Our product is simple enough as a lot of thought went into developing it to ensure people will find the right cover. We had interaction with the regulator to ensure the product provides adequate advice. Clients can go back later and buy or choose not to buy. I believe it gives you the opportunity to do it yourself and guides you step-by-step," said Paterson.

Infiniti Online, for instance, does not have a call centre like other direct players on the commercial side in the insurance industry.

"If you call our offices you will speak to an underwriter or a claims person. Our way is to answer questions online rather than clients having to listen to someone and then answer. You can get cover any time and do it as quickly as you like," said Paterson.

"Our offering is in line with the movement to online - like Airbnb and Uber everything is going online - as people take their destiny into their own hands. That is where we moved with insurance. Of course we also provide a phone number to use as an option."

As for future plans, she said they plan to move more products onto an online platform. There is also a huge simplification of processes, especially on the commercial side.

"We have done the opposite of most direct players. They have written business directly and then gone to the broker market, while we have since 2008 been writing broker business. Our business had R1.4bn premium income for the last financial year ended 1 April 2016 and we will be even larger next year," said Paterson.

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