Maximising your insurance

To solve the problem of underinsurance and disappointment at the claims stage, app-based insurer Naked is using artificial intelligence and technology to estimate your ideal insurance requirements.

Ernest North, co-founder of Naked, says they use a chat box called Rose, which can insure your contents within a few minutes.

Apart from requesting photographs of specific items you wish to insure, Rose asks you to take photographs of specific rooms where high-value items may be found, such as your living room.

“We then use AI imaging and work out if there are high-value items in your home and whether you are possibly underinsured. For example, you may only want R150 000 of household contents insurance, but you have a R40 000 entertainment system. At this point, Rose will make a recommendation and we may take the conversation forward with the support team to understand how you came to your estimation,” says North, who adds the aim is to ensure you have the correct cover so there are no disputes when claiming.

North says people often overestimate how much their household contents would cost to replace and that, for just a few extra rands, they could have far better cover.

For many people who may be living in a flat or sharing with friends, household contents insurance may seem unnecessary, yet they would want to insure their valuable items such as their cellphones and laptops. North says that consumers don’t often realise that it is usually more cost-effective to take out contents insurance and then add a laptop or cellphone to the existing policy.

For example, if you are 25 years old with good household security and want to insure a R10 000 laptop and a R10 000 cellphone with a R1 000 excess, you would pay about R228 a month.

If you took out household insurance for R150 000 and added the laptop and cellphone as specific items, your premium would be R263 in total.

Effectively, for an extra R35 a month, you receive an extra R150 000 of cover.

This cover also includes an “away-from-home” benefit of up to 20% of your content cover. This is to cover unspecified items if you are robbed outside your home.

For example, if your handbag containing your cellphone and sunglasses is stolen, you would be paid out R10 000 for the cellphone you have specifically insured, but you can also claim up to R5 000 per unspecified item up to 20% of your cover (in this example, R30 000).

In other words, you could claim up to R5 000 for your handbag and R5 000 for sunglasses. 

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