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Listen: Exposing hidden costs: the truth behind your insurance excess

Mar 8, 2024

Have you ever taken a close look at your short-term insurance policy? Do you know exactly what your insurance excess is? Not too many people do, but if you study your policy wording, it can be quite the eye-opener.

In the latest episode of the My Money, My Lifestyle podcast, we dive into the world of insurance premiums, excesses, and the small print that could make a big difference in your financial life.

It starts with my own experience – an unexpected hike in my insurance excess. Despite my monthly premium staying relatively stable, I was surprised to find that the amount I would have to pay out of pocket in the event of a claim had increased significantly. This prompted a discussion with friends and colleagues, leading me to realise this wasn’t unique to me.

To get to the bottom of this, we invited Karen Rimmer of PSG Insure to come and have a chat. Karen confirms that yes, this is a trend, and it’s one with multiple causes, including recent global events and local economic and infrastructural challenges.

Balancing act: insurance excess vs insurance premiums

But it’s not all doom and gloom. Karen points out that this gives policyholders an opportunity to negotiate with insurers and find a balance between your insurance excess and your premium that works for your budget.

We discuss the importance of understanding your insurance contract so that you know what you’re covered for and under what conditions. We also touch on the concept of self-insurance, where you take on the risk for certain assets, and how that can be empowering but risky if not managed properly.

Rimmer gives some practical tips, such as getting an insurance assessment to check whether you may be over- or under-insured, and learning about the ‘value-added’ products that might already be part of your policy. The conversation also covers the less obvious aspects of insurance contracts that can be surprisingly beneficial, like coverage for tree removal after a storm or leak detection services.

Understanding your insurance can help you take control of your finances and make informed decisions. This episode is a must-listen for anyone who wants to navigate the complexities of insurance with confidence.

📋 Episode Chapters

  • (00:00) Introduction to short-term insurance surprises
  • (01:22) Maya’s personal experience with excess fee increases
  • (03:40) Karen Rimmer explains the industry trend and its causes
  • (06:15) The impact of global and local events on insurance claims
  • (08:50) The role of risk underwriting and individual factors
  • (10:35) The shift towards a risk-sharing model between insurers and clients
  • (13:05) How to approach self-insurance responsibly
  • (15:30) The fine print: what to watch out for in your insurance contract
  • (17:45) The advantages of having an insurance assessor evaluate your home
  • (20:10) Uncovering hidden benefits in your insurance contract
  • (22:35) The value of expert advice from a financial adviser
  • (24:50) Special perks for policyholders over 55
  • (26:40) Closing thoughts on the importance of understanding your insurance details

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Maya Fisher-French author of Money Questions Answered

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