As the name suggests, short-term insurance protects assets for a short period. This type of insurance is designed to give you peace of mind and temporary protection against loss or damage to your private property when certain insured events occur, such as vehicle accidents, vehicle theft, or hijacking.
There are various types of short-term insurance: personal, travel, and commercial. However, not all insurance companies have a licence to sell all these types of insurance.
Short-Term Insurance and How it Works
Short-term insurance looks after you and your personal assets, which differs from long-term insurance. Long-term insurance provides insurance policies for investments in life such as medical insurance to look after your health, life insurance to take care of your family and loved ones once you have passed on, retirement annuities to take care of your aged years, and stable investments on the stock exchange to ensure your financial future..
Essentially, a short-term insurance policy allows you to pay an amount every month in exchange for protection against the financial expenses associated with loss, damage, or a claim against you personally. It is an agreement between a policyholder and an insurer that is in place for a limited time. For these reasons, your insurance needs will change over time. So, the policy needs to be flexible and provide enough coverage for various needs and circumstances.
5 Types of Short-Term Insurance Cover
Short-term insurance can cover various needs, both personal and professional. Some of the most common types include:
- Vehicle cover: This includes third-party insurance for damage caused to another vehicle in an accident where you are at fault. Additionally, it can cover the asset if it is stolen or damaged by fire. Or you could insure the vehicle comprehensively, which covers all these circumstances as well as vandalism, hijacking, or damage caused by weather events.
- Household cover: This type of short-term insurance covers theft, loss, or damage to valuable possessions that are kept in your home or on your premises. It covers damage from fire, flooding, or robbery, for example.
- Personal liability: This protects you against any legal responsibilities, such as a lawsuit after an accident or slander accusations. Additionally, it may cover injuries to a third party in an accident on your property.
- All-risk cover: This includes personal possessions that could be stolen or damaged when you have them in your possession outside of your home. This includes assets such as jewellery, cell phones, laptops, tablets, or cameras.
- Homeowner and business property cover: This covers the property itself in the event of damage caused by fire, flood, hail, wind, or other natural disasters. It also covers events such as geyser leaks or structural damage.
Benefits of Short-Term Insurance
Accidents and incidents of theft or damage occur when we least expect them, but they come at a cost that you may not be able to afford when they happen. Short-term insurance helps you to replace possessions and pay for repairs, legal fees, vehicle towing, and storage without having to go into debt.
At Efficient Wealth, we provide you with a competitive analysis of alternative cover options and quotations to accommodate your every need. We do this through our world-class electronic platform. This places you in a position to make informed decisions about your short-term insurance options. Contact us at Efficient Wealth.