A house is likely to be one of the most valuable assets a consumer will own. While homeowners put a lot of time, effort and money into making it their ideal home, it is equally important to make considered choices when it comes to protecting and insuring this investment.
While homeowners put a lot of time, effort and money into making it their ideal home, it is equally important to make considered choices when it comes to protecting and insuring this investment.
Shehnaz Somers, Head of Personal Lines Underwriting at Santam advises homeowners to go through the following check points before purchasing or updating their home insurance:
1. Know exactly what you are covered for
It is important to know what it is exactly you are covered for as well as the extent of your insurance cover. Comprehensive homeowners insurance should include structural cover and cover for the contents thereof.
The first part of the cover protects your house itself, or in other words, the actual building. This covers things like the walls, roof, windows, geysers against certain perils such as lightening, fire, hail, vandalism, storms, etc.
The second part of the cover insures the contents of your home such as major appliances, furniture, jewellery and clothes.
2. Ensure that you have enough cover
Customers can often be underinsured, a fact that only comes to light at the stage of making a claim.
But how do you know if you have too little insurance? A really good tip is to start with a home inventory to help you assess your insurance needs.
First you need to know how much it would cost to rebuild your house today on your existing lot. Use your broker to find out what the market rate is per square metre should you need to rebuild your house. Multiply that times the square metreage of your house and the total is equal to the insurance coverage you should have.
The amount of your personal property coverage is a percentage of that amount (normally 55 percent and can be upgraded to 75 percent).
For your belongings inventory, list every item in your home and garage, when you bought it, its original cost and its estimated value. It also helps to have photographs of your possessions. Keep one copy in a fireproof safe at home or a safety deposit box.
Marking your items with a personal identification number such as the last four digits of your ID number (don't use your full ID number as that will make you vulnerable to identity theft) will make reclaiming any stolen items easier.
If you ever need to claim, the inventory will make the process easier for you and will ensure that you are compensated for everything.
3. Understand the terms and conditions of your cover
Shehnaz Somers, Head of Personal Lines Underwriting at Santam says it is important that you know that special limits may apply to certain types of personal property or the contents of your home. For example, money bank notes and rare coins, securities, stamp collections, jewellery, firearms, silverware/goldware, rugs, tapestries and wall hangings may be subject to a separate or special insurance policy.
Qualification for home and contents insurance is restricted to consumers who are the legal owners of the house that is to be insured. In addition, the ‘house’ or home must have brick walls and either a tiled, asbestos or corrugated iron roof.
It is also important that you know that special limits may apply to certain types of personal property or the contents of your home. For example, money bank notes and rare coins, securities, stamp collections, jewellery, firearms, silverware/goldware, rugs, tapestries and wall hangings may be subject to a separate or special insurance policy.
4. Update your policy
Clients often forget to inform insurers about changed circumstances and accumulation of new possessions.
Unfortunately they only realise the impact of this when they have to claim.Itis critically important to update your policy annually, to ensure that any new items are accounted for and covered.
It is also important to let your insurer know what improvements or additions you have made to your home to avoid being underinsured for them.
5. Get an expert on your side
If you are not sure about what it is you are being quoted on or are unsure about any aspect of your cover during the life cycle of your home policy, get an expert to help you.
Brokers are a tremendous source of information, advice and can assist you with a myriad of things from helping you update your inventory, providing your insurer with a new residential address, to helping you with the entire process of lodging a claim with your insurer.
