Different insurance policies offer different benefits and restrictions - make sure you understand your policy. Read it carefully before you sign it, and ask about exclusions, restrictions and excesses.
Homeowners' insurance
This is essential insurance for anyone who owns their own home. It covers
you for damage
(by fire, lightning, storm, wind, water, etc) to the actual building
and all the fixtures
and fittings
, such as tiles, fitted carpets, etc. It even covers some types of accidental damage. There are many other extensions
to the homeowners' policy - be sure to ask your broker about them! Be aware, though, that maintenance and deterioration through age (wear and tear) are not insurable.
The policy may not cover
you for subsidence and landslides or riots and strikes unless you ask for them to be included. There are other exclusions
in your policy too, so make sure you understand what is and what is not covered!
The bank
will insist that you buy homeowners' insurance when you take out a bond
. The bank can arrange it for you or you can buy it yourself through a broker or direct from most insurance companies. It is your responsibility to make sure that your house is insured for the correct replacement value and that you reassess the value regularly. Remember, when you do not have a home loan, or you have paid it off, insurance becomes your
responsibility.
Household contents
This type of insurance covers the contents of your home
against damage
caused by fire, storms, floods, theft, water leakage, accidents etc. Some insurance policies have exclusions, or sections may be subject to excesses; for example, a theft excess of R1 000, which is the amount you will have to pay yourself.
Most insurance policies that cover household contents require some sort of security system
- for example, burglar bars, security gates or an alarm. Make sure that you know what your policy demands
and install what is necessary, or the company can refuse to pay out when you put in a claim.
Watch out!
Make sure you value
the contents of your home accurately
- that is, how much it would cost you to replace everything
if your house burnt down. Value
your goods on a new replacement value
basis, which is how much it would cost you to buy the same (or equivalent) new item. Sometimes, people think they will save on their premiums by calculating the value of only the things they think are most likely to be stolen. This is unwise! If you do not value the contents of your home properly, you could be under-insured
- and if you need to claim, you will be penalised
because of the under-insurance. Ensure that you have adequate cover and adjust it on a regular basis.
All-risks insurance
There are some possessions which we normally carry with us
and which may be lost outside the home
, for example, cell phones, cameras, sunglasses and bicycles. Most household contents policies offer an all-risks
section to cover these, but specific items may not be covered unless they are individually listed on the policy together with their insured values. Check
with your intermediary whether your policy includes this type of cover.