Don’t be tempted to reduce your insurance coverage

By Robert Cooper    March 17, 2020

With small businesses still finding life tougher business-wise, particularly now with pressure on expenses, we all will be looking at ways to cut costs.

We have pressure to increase wages for our employees, increasing power bills, increasing rents and increasing prices of stock whether it is food and vegetables (that are affected by drought, storms or product tamper), or imported goods from overseas which have increased due to our lower dollar.

For Business, it is tempting to look at items such as the cost of insurance. Whether to become under-insured, or at worst un-insured for certain risks. Some policyholders will drop property cover altogether and just keep the liability risks in place, and take a chance.

It is not helped by a current Insurance climate where we are now seeing premium increases. Our main hope as Insurance Brokers is that the Insurers might become a bit easier to deal with on claims, but if it causes business owners to cut back on their Insurance protection, no one wins.

On a personal basis for the individual, health insurance, car insurance, and home-and-contents insurance are also first on the firing line for cutbacks and cost saving. Many Australians plan to make changes to their budgets this year in order to battle ongoing financial uncertainty.

Households are becoming more focused on managing their financial situation due to low wage rises and uncertainty about interest rates and housing markets.
The buying public are not as loyal with brands as they used to be in the financial services sector because there are now so many different ways to get price information. It makes it easier for them to shop around for the best price deals but not always the best or most appropriate coverage.

Findings also showed that 44% of people plan to cut back on personal spending on things like clothes and eating out, 41% plan to reduce energy usage, 35% will buy fewer groceries, and 19% will downgrade or cancel travel plans, news.com.au reported.

General Advice Warning
This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

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