Tips to get a claim paid in full

Insurers have to shoulder some of the limitations and exclusions.

- Marius Kemp

READ SMALL PRINT: DON'T UNDERINSURE; ALTER EXCESS IF NEEDED; ALL-RISK FOR MOVEABLES.

Your short-term insurance contract can often seem overwhelming in its complexity, and particularly frustrating when a claim is not paid out in full or even declined.

It is essential to understand the type of cover you have versus your needs.

Having adequate insurance coverage that is relevant to your needs is key. This will help alleviate the financial burden of getting back on your feet should an incident occur.

Below are five of the most common pitfalls we see that consumers overlook when it comes to the terms and conditions of a short-term insurance policy.

1. Underinsurance: In short, you are underinsured when you insure your assets for less than what is required to be able to be in the same financial position as prior to your loss.

The insured value of your contents, building or item you are insuring must be equal to the current replacement value, not the original purchase price or current market value.

If you are underinsured, you won't be paid in pull when you claim. If you insure for only 50% of the replacement value, then you will be paid only 50% of the loss in accordance with a principle called "averaging".