Protecting the assets of students: a vital step in holistic financial planning
18 Jul, 2022

The first semester of tertiary education facilities across South Africa is upon us, and for parents who are financing further education for their children, there are many factors to consider. Apart from the cost of textbooks, stationery and tuition, there is an aspect that many parents may not take into account when planning their financial commitment – the short-term insurance for personal property and physical assets.

Bertus Visser, Chief Executive of Distribution at PSG Insure explains: “The costs of sending a young adult to university or college certainly do add up. But what South African parents need to remember is that loss, theft and damage are unfortunately very real eventualities. Repair and replacement costs can arise at the most inopportune moments, but one way to avoid an exorbitant outlay is to insure student essentials like laptops, iPods, bicycles, cars and televisions.”

Sunday 18 April 2021 was a pivotal day for students at the University of Cape Town. On this day, a runaway fire caused extensive damage to campus property and a number of residential buildings. Fortunately, no lives were lost in the blaze, but 4 000 students in residences were forced to evacuate with little to none of their belongings.

Estimates equate the damage at UCT to between R500 million and R1 billion. If anything, what this sudden and unpredictable event brought to the fore was the importance of insurance for the valuable possessions of students.

He warns that while some insurers may cover student possessions in the event of a natural disaster or theft, there will always be limitations. “For example, an insurer won’t cover the cost of a laptop or phone being stolen while in transit, except if insured as an “All risk” item on the policy. It’s always useful to find out what these limitations are and to make sure that student possessions are correctly recorded and insured in the unfortunate event that the unexpected occurs,” says Visser.

Student budgets are notoriously stretched, so the reality is that the majority of students will not be able to carry the cost of replacing a valuable lost or stolen possession. Neither will they have easy access to credit to replace the item. Inevitably, the cost of repair or replacement will fall on the shoulders of parents or caregivers, and in circumstances like the fire at UCT, where entire residences were destroyed, the costs can add up.

For example, a student who owns a laptop, a television, a portable music device and a game console will be in possession of items that can easily amount to over R40 000. There is also the possibility that certain students who require technical equipment to complete their studies may be in possession of items like expensive photographic, digital or scientific equipment, which will increase the amount that would need to be paid upfront, should items go missing without having been insured.

“A number of factors are taken into account when considering the insurance premium for the possessions of students, including where those goods are stored, whether any security measures are in place, and the replacement value of the items. “It is also important to disclose the location of these assets to insurers – for example, where a student vehicle is kept overnight for most of the year. If not disclosed, it can lead to the rejection of claims. We encourage parents to ask questions from the outset and consult an adviser before putting together their financial plan for supporting their children’s educational journeys,” concludes Visser.



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