Before leaving your home this holiday, make sure you are properly covered
With the mid-year school holidays around the corner, many homeowners are planning a vacation. We’ve put together a guide to help people make sure their home contents are properly covered before zipping up their bags and heading out the front door.
It is widely reported that many South Africans with household contents are not adequately insured. This means that if disaster strikes and your household contents are lost or broken during difficult economic times, it can be tough to recover from the financial setback. That is why it pays to find out whether your home and your valuables are correctly covered by your insurer.
Attie Blaauw, head of personal lines underwriting at Santam, urges people to fully understand the terms and conditions of their household contents insurance policy. “People often don’t know how to calculate the correct replacement value, and often are not aware that they do not adhere to the terms and conditions of their insurance policy. At Santam, we look for reasons to pay claims, rather than not. This is why we endeavour to educate our clients to assist them to insure correctly.”
In the year to date, Santam received more than 25 000 household contents claims, which includes claims associated with theft, fire and storms.
Below are common misunderstandings around household contents insurance that could result in claims being rejected or not paid in full.
- You need to comply with the security requirements of your policy. If your insurance policy has a requirement that stipulates that you need burglar bars, this will be compulsory. The material circumstances to the loss or damage of every situation is individually assessed so always make sure that you adhere to the requirements stipulated in your policy.
- House contents coverage has limitations. Blaauw says it’s important for people to remember this. “Household contents insurance provides cover for property inside the home or temporarily in the places mentioned in the insurance policy wording. Always ensure that you are aware of all the terms and conditions applicable to be correctly covered when going on holiday.
- Many people are unaware that they are underinsured. “It can come as a nasty surprise to find out that you insured your contents for R200 000 but the new replacement value of all your items is R400 000. Your insurer will only pay only 50% of the amount claimed in this example. If you want to be covered in full, you must ensure that the sum insured of your house contents reflects the new replacement value of all your house contents. Remember, you will need to provide reasonable proof of ownership to substantiate your claim, either in the form of a proof of purchase, valuation certificates or photographs – or as specified by your insurer,” notes Blaauw.
- There’s a limit for valuable articles: Claims for valuable articles are limited to one third of the insured amount of your contents if it is not specifically insured under the All Risks section of a Santam policy.
- If your business is run from your home, you will need extra cover. If you have a substantial business operating out of your home, consider commercial insurance which can include fire-, loss of profit-, burglary and public liability, etc. insurance cover.
Blaauw says that clients have the option of paying a lower premium if they wish. “ If clients want full cover, they need to know the new replacement value of their household contents by having them calculated by a qualified evaluator or they can do the calculation themselves by utilising the online tools such as Santam’s inventory calculator,” says Blaauw.
Says Blaauw: “Santam continuously explores alternatives to assist clients to better assess the replacement value of their home contents. The true value of insurance is to put clients in the same position they were in, prior to their loss. To this end, our business invests in tools to help clients ensure they are more accurately insured, such as inventory frameworks and contacting professional evaluators. Santam has also introduced a new model that takes away the element of uncertainty during insurance claim settlements for household contents. Provided clients have fulfilled a few easy steps and agree to a minimum household contents value, we offer a home contents guarantee which provides them with the peace of mind that a valid home contents claim will be settled in full.”