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Tis the season … but don’t forget your insurance

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What your insurer wants you to know this holiday

13 December 2021: The countdown to the festive season has begun. If your family tradition includes gift-giving, you only have a few days left to get your shopping done to fill the stockings or decorate the space under the tree.

“The holidays are top of mind for many consumers, whether through gifting, or otherwise in anticipation of much-needed downtime with family or friends, either by travelling to a holiday destination, or enjoying a stay-cation,” observes Lizo Mnguni, spokesperson for Old Mutual Insure.

However, he says that the silly season brings with it a number of unique risks that consumers would be wise to take note of, whether it is to remember to insure that expensive gift under the tree or to be aware of safety and security risks in and around your home, when enjoying a stay-cation or going on holiday.

“At the risk of sounding like the Grinch, we see time and time again how consumers fail to take simple precautions to protect their homes or cars. We urge all consumers to follow a few simple tips to enjoy greater peace of mind for a safe and rewarding holiday,” says Mnguni.

Stay-cation or local holiday? Either way be safe

 Mnguni says that the new omicron variant has added a fresh level of concern for many in anticipation of the holidays, which may see more families opt to conduct their festive season shopping online, and stay at home rather than visit places like museums, malls and restaurants, but there are risks to staying at home.

“You may go to great lengths to bring the holiday spirit into your home, with candles, festive lighting and cooking around the braai or open fire. If you are entertaining it is likely you will be more relaxed, but remember that many holiday fires are caused in this way,” says Mnguni.

With careful consideration, holiday fire hazards are preventable. For example, before  decorating with lights, check each cord to make sure they aren’t worn or broken, and all the bulbs are tightly connected. The same care and caution should apply to outdoor lights, using clips and not nails to hang them to reduce damage. It’s also important not to overload electrical outlets with too many holiday lights and household extension cords, which can overheat and cause fires.

Another risk to look out for is that criminals target residences when people are at home, especially when entertaining.

“When having guests over, don’t advertise the fact. Try to park all the vehicles on your premises where they can’t be seen from the street. Encourage guests to use a taxi hailing service. Homeowners should still lock all doors not visible from the garden, ensure the electric fence is functioning and all perimeter entrances remain closed or monitored at all times.

But criminals, who have an array of scams that will attempt to rob you of your personal possessions or get access to your bank card and pin details, also target malls, especially with heightened shopping activity like Black Friday, Cyber Monday and Christmas, potentially drawing in the crowds.

Unattended homes are also a prime target for criminals during holiday time. Homeowners who are travelling and are unable to get a house sitter should, “install timers on strategic interior lights and have day-and-night bulbs on exterior lights,” advises Mnguni.

It is critical that alarms and other security measures are fully operational while you are away as many burglary policies, for example, will not pay out if the security arrangements listed in the policy documents were not working at the time of loss. Storms, lightning strikes, power failures, as well as branches and other debris on electric fences can all compromise security arrangements. Householders should be sure they have, “plans in place to manage these eventualities as they occur – even while they are away.”

While roads are likely to be less busy this year, it is still a good idea to have your car serviced – and safety checked – before heading off on that long drive to the bush or coast. It is also a good idea, “to phone your vehicle insurer and check the detail of your roadside assistance package,” says Mnguni. Does this cover jump starts, tyre changes, locksmith call outs and key replacement, as well as towing, storage, vehicle hire and emergency accommodation, for example? All of these are important if you are travelling long distances through isolated parts of South or Southern Africa.

Holiday gifting trends being driven by HNWI

Data by Oracle suggests that 34% of consumers are considering buying more gift cards this year, 26% of consumers said they plan to buy more fashion apparel, home goods, and electronics. Beauty products were the gift of choice for 26% of respondents, while footwear was the next best choice for 22% of consumers.

According to news reports, consumers are likely to spend the most on travel and experiences, followed by electronic devices this holiday.

This is echoed by the 2021 Deloitte Holiday Survey, which shows that the average holiday spend has increased, aided by a return to experiences. It finds that high-income households are driving the uptick in holiday spend.

“Many wealthier families who would have travelled overseas this festive season and have recently had their travel plans dashed may now opt to spend more handsomely on local holidays at exclusive resorts and luxury accommodation,” says Tarina Vlok, MD of Elite Risk Acceptances, a specialist high-worth insurer and subsidiary of Old Mutual Insure. “We may also see wealthier individuals buying their loved ones expensive gifts, such as art, jewellery, or luxury name-brand handbags, shoes or designer sunglasses; all of which are popular gift choices for our client base.”

Present choices may include Montblanc pens, Rolex or Cartier watches, or items from luxury fashion houses like Louis Vuitton, Prada or Gucci. Earlier this year second-hand luxury house Luxity reported selling a  Hermès handbag for R220 000.

“We continue to see that the ultra-rich tend to underinsure when it comes to luxury items and over-insure against low-risk threats. This can be especially devastating for those with sentimental investments such as jewellery, art, classic cars or wine,” says Vlok, adding that shockingly, on average people are underinsured by 40%.

“As obvious as it sounds, remember to ensure that your sum insured is sufficient to cover your high-ticket purchases this festive season, as a loss whether through robbery, damage or other means, can be devastating if it happens during the most wonderful time of the year.”

Here are some top tips for stress-free holiday bliss:

 For the wealthy, here are a few top tips provided by Vlok to keep your luxury items safe this holiday season:

  • Don’t share pictures of your new bling or luxury gift on social media, especially as crime syndicates are very active at this time of year.
  • Keep the proof of ownership of your jewellery items and get it to your insurer as soon as possible, preferably as soon as it is bought and not after the festive season.
  • If you are gifting a high value item to someone who is not in your immediate family, it is the responsibility of that person to insure the item when they receive it. Until then, it will be covered under your own policy.
  • If you are travelling on a local holiday with an expensive piece of jewellery, check with your specialist HNWI insurer whether this is covered under your normal policy, as most insurers require you to notify them if you are removing it from your bank’s safety deposit box, or if your storage conditions have changed (e.g. no longer being kept in a locked safe overnight).

Here are Mnguni’s tips for planning a successful vacation, or stay-cation:

  • Many homeowners don’t need to update their insurance coverage during the holiday season, however this is not true for everyone. If you plan to decorate your home with lavish ornaments, entertain guests or purchase expensive gifts, you might need to review your liability or personal property coverage with your insurer or broker.
  • Take care to secure your property before going on holiday, and switch off appliances, especially given that loadshedding can happen without notice, and can cause damage to electrical appliances. It’s also a good idea to have a neighbour or friend check the house from time to time, collecting mail and reporting any damage.
  • Before embarking on a long trip, holiday makers should be sure that the vehicle they are travelling in has been properly maintained. Ideally, always plan a service ahead of a long trip. Failing a full service, at least check tyres, oil, battery and fuel before setting off.
  • Pay special attention to potential fire hazards, and if you are relaxing with alcohol, make sure that someone responsible is in charge of ensuring all candles and fires are out before going to bed.
  • If you have to go to a shopping mall, be extremely vigilant when locking your vehicle to avoid becoming a victim of car-jamming.