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How risky are you?

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Is your car flashy or conservative? Do you have a house alarm? Do you live in the suburbs or the city? Are you male or female? Does your insurance cover your laptop when you move from point A to B? Your answers to these questions affect your risk personality which ultimately affect your insurance premiums. This begs the question “How risky are you really?”.

Your risk personality is a living, breathing variable affected by everyday life decisions and requires cultivation and attention at every touch point in order to achieve your ultimate personality. The “riskier” you are, the more you will pay in premiums.

You take vitamins and eat well to optimise your health, so why not apply that to your risk personality in order to optimise your premiums? Today, insurance tries to be as scientific and data driven as possible in order to insure that your premiums match your risk profile and personality. It is based on your needs. Insurance cover is ultimately about financial security so you don’t need to consider the financial burden of a loss.

Fire destroying your house could cost you anything from a relatively small repair to having to rebuild it completely, including all your valuable contents. Theft of your vehicle could cost you the entire value of your car. These are sudden costs that you may struggle to recover from. Prevention is a necessity. Having a cushion to ensure that you are taken care of during unforeseen circumstances is one step to ensuring that you can recover from loss. Making sure that you have a good risk profile is the second.

Here are my top do’s and don’ts to help you assess and optimise your risk profile:

  • Don’t sweat the small stuff. Do insure and claim for things you cannot afford to replace.

Blaauw advises that if you can afford to replace something on your own then do so. An increase in the number of claims has a negative impact on your risk profile as you appear to be “at risk” often. Only claim on your insurance for unaffordable losses and damages.

  • Do manage your risk profile from a safety perspective.

Optimising your risk profile is as simple as asking yourself “how safe is this?” and then taking corrective steps. If you start by viewing the situation from a personal safety perspective, you will by default improve your risk profile. Don’t park your car on the street without an alarm system and if you can, avoid parking on the street completely. Don’t leave your house unlocked and without an alarm. Don’t leave your belongings unattended.

  • Do provide your insurer with more evidence.

The more your insurer knows about your good behaviours, the better your premiums. Technology has allowed for devices that are able to monitor your speed when driving or alarm systems that lock up your property without you having to worry about it.

  • Do stay with your insurer for as long as possible.

The longer you stay with your insurance company, the more confident they grow in your profile. You will see the benefit of that coming through when you renew your policy after a year.

  • Do start as early as you can.

Some parents start gifting their children with cars when reaching the age of their maturity and include the car’s insurance under their own. Starting with your first car from as young as the age of 18 can insure that you build up a credible risk profile even if it is not under your own insurance cover. Your profile can always be transferred to your own insurance policy when the time comes.

Santam - Risk Profiling