The new year is in full swing already, but for those who enjoyed a festive break, holding on to that holiday feeling might be quite tempting. Procrastinating can be peaceful to a point but delaying some important upgrades to your insurance cover could become quite a depressing reality check.
READ | 5 short-term insurance resolutions to 'keep' this year
“Visiting restaurants and partaking in other leisure activities are somewhat restricted or different with masks and the like, so some of our leisure spending has perhaps shifted towards making home the happiest place it can be,” says Bertus Visser, Chief Executive of Distribution at PSG Insure.
With the ever-increasing cost of living, homeowners may be reassessing their financial situation and looking at ways to save money and cut down on costs. Ideally, homeowners should review their insurance policies as part of an annual financial assessment – as the value of your home and the content therein changes in value each year.
Thus it makes sense that your insurance cover should be adjusted accordingly.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says checking your insurance and possibly changing cover is a good way to save money. The research may take some time and effort, but it is always worthwhile to ensure that the current policy is still the best option.
“While insurance is a necessity for homeowners, it does not have to be a financially draining burden. Shop around and see what options are available from the various insurance providers," says Goslett.
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Competition in the market forces insurance companies to launch new products regularly and consistently try to find ways to undercut their competitors. “So, while your policy might have been the most competitive when you first shopped around, it might no longer be the best policy a year later,” he advises.
There are centralised sites that provide quotes from different providers without you having to search on other portals.
You will be required to load your details and insurance criteria, after which you will receive a list of all insurance companies and policies that match the requirements. The list will also include the premiums prices each option. This will quickly paint a picture of which company can provide the best value.
According to Goslett, the basic elements to check for when comparing policies include:
- Does the policy include liability cover, which will cover any injury or damage done to other people on your property?
- Check the clause for household contents and personal property as certain items may be excluded or covered under another type of insurance?
- Does the policy require that certain items be specified, such as jewellery and laptops or other electronic devices?
Keep your 2021 in check
1. Understand your cover
According to Vera Nagtegaal, Executive Head of Hippo.co.za, most areas have a capped property value, and with current decline in property prices in addition to the increase of building costs, there is no guarantee that upgrades to properties will increase the value in the long term.
Nagtegaal says that, more importantly, if homeowners are to embark on upgrades or improvements, they should also be mindful of the insurance implications. “Any additions to the home should always be certified by a reputable contractor and added to your insurance policy as claims can be repudiated or only partially paid out if these are not declared and covered in the policy.”
She also points out that if you lose your home in the event of a disaster, your building insurance should cover the full value of replacing your property. “The last thing that you want is to have to claim from your insurer and realise that you may be underinsured.”
Nagtegaal explains that, with declining house prices and rapidly increasing building costs, there can easily be a gap between the market value of properties and their replacement costs. “It is therefore important to re-evaluate your building insurance on an annual basis, to ensure that the amount your home is covered for reflects the current value of replacing your property.”
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2. Update your home inventory
Once you’ve taken an in-depth look at your homeowners or renters insurance policy and know your policy limits, you need to update your home inventory and make sure everything you own is covered in the case of a loss. This is especially important if you’ve bought or received expensive items in the past year (or since you last updated your policy), such as electronics or jewellery, according to Keyman Insurance Cover.
3. Update your insurance agent about life changes that could affect your policies
A lot can happen in twelve months. PSG suggests using January as a fresh start to take stock of what’s changed in your life over the past year and consider whether those changes might warrant an update to any of your insurance policies.
"Did you get married or divorced? You may need to update your coverage amount or change your beneficiaries. If you welcomed a new member to the family in 2020, you’ll definitely need to take a look at your life insurance policy. A new job can also warrant some changes to insurance policies, especially if your income changed. If you moved last year, take another look at your homeowners or renters insurance policy, as well as your life insurance policy.
READ: Building vs Home contents | Know exactly what your insurance covers
"Other changes that could affect how much coverage you need include the purchase of an expensive item, an increase or decrease in the amount of time you spend driving, or a home remodel.
4. You renovated your home and improved security
Perhaps you have added an enclosed braai room, a new patio, home office, or an extension to the kitchen. While your first instinct might be to focus on complying with the regulations that apply, you should not forget that insurance needs to be updated to cover whatever improvements you make.
These costs need to be collectively included in your property’s replacement value and insured accordingly, advises PSG.
Security improvements are important to note too when it comes to your cover, advises PSG. "Not only do these keep us extra safe, but they can have a positive impact on your insurance premium, within terms and conditions", it could end up saving you some money.
5. You upgraded your entertainment, bought new clothes or appliances
Spending more time at home means many are investing in a new TV, sound system or perhaps a gaming console. These items need the appropriate insurance cover, says PSG.
"Be it kitchen appliances, a new laptop or even some cooking books, items like these also need to be considered. A handbag might be part of the mix or perhaps some sports equipment too. What you spent or what was spent on you to own these items, must also go into your total contents insurance cover. It can be very pricey to replace a wardrobe if a flood or fire destroyed it, especially without adequate insurance."
READ | How to get a better deal on your home insurance
These are just some examples. Thinking about your own home and recent additions or purchases should hopefully inspire a game plan. The new year is a nod to checking in on your cover to ensure your bigger picture is accounted for, always.
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