Do your homework when insuring your home

According to recent statistics there were about 3 million crimes committed in our country between 2010 and 2011 and about 15% of those crimes were housebreakings. Protect your budget against the crimes of our times and ensure that you are properly insured. 

We called upon some experts in the industry to tell us more about home insurance and what it entails. 

Home insurance

There are a few different types of house insurance options available:

Buildings Insurance

MiWay says that buildings insurance is necessary as it covers the loss or damage to the actual building structure in case of:

• Fire damage due to an electrical short or a lightning strike
• Water damage due to a water main burst which floods your entire property
• Water damage due to a burst geyser
• Damaged gate motor or pool pump due to lightning strike
• Ground movement including subsidence and landslip

“These scenarios can easily become a reality and they affect countless South Africans on a daily basis. These nightmare scenarios could see you falling heavily into debt trying to repair your home if you do not have buildings insurance.

Buildings insurance, sometimes called homeowners insurance or houseowners insurance will also cover your thatch roof property providing there is a SABS approved lightning conductor installed on the premises.”

Home contents insurance

The experts at Virseker says that home contents insurance or household insurance covers the possessions that are in your home. An easy way to determine this is to imagine taking the roof off your home and turning it upside down, everything that falls out of your house constitutes your home contents. For example, furniture, clothing, electrical equipment and loose carpets. These items are insured for a wide range of specific perils such as fire, theft and flood while inside your house or building.

All Risk Insurance 

According to MiWay portable items like laptop computers, notebooks, iPhones, smart phones, iPods, cell phones, sunglasses and the like which could be carried outside the home should be covered under all risk insurance and specified if more than R1500 in value. These portable items could be covered under your contents insurance but the loss would need to occur while inside the home noted on the policy coversheet. Contents Insurance covers all your personal possessions inside your home. These items would typically be your television, hi-fi, kitchen appliances, furniture, TV etc. 

In what instances does your household insurance not pay out?

According to VirSeker you must ensure that you have calculated the sum insured correctly – to determine the correct sum insured for your household contents you should remember that your possessions are insured on an old for new basis so, use current replacement values as your guide, allowing for inflation. Don’t under-insure! The danger of underinsurance, which occurs when there is a discrepancy between the premium paid and the replacement value of what’s being insured, is that your cover will be inadequate and your insurer will not meet your claim in full when it comes time to claim. 

If you are a tenant

If you are a tenant renting a home, you will only need to take out insurance on the content of your home and on your cars. It is the responsibility of the owner to insure the building. 

What would the premium of a basic newly wed couple look like?

According to PSG Konsult basic insurance for a newly wed couple (with two basic cars), renting a home would look like this:

How you can save on insurance?

According to Tom Healy, unit manager of Risk services at Alexander Forbes, you can save on personal insurance costs by: 

• Getting a reputable broker to shop around for you to get the best price for the same insurance product package.
• Having an alarm (with armed response services), security gates, burglar bars, lightning arrestor (if thatched) and the like installed in your home can help to lower your premium.
• Taking care of your personal belongings and ensure that you are just insured for things that you still have. There is no use in paying a premium for that laptop or cell phone that you no longer have. 
• Combining all the different types of insurance you have and insure at one company only. This can help to lower your premium considerably.
• Not claiming for every little thing if it means losing a high no-claim-bonus.
• Staying with your insurer to earn any loyalty bonus offered.
• Knowing when you qualify for discount on your monthly premium. Your premium will be lowered when you turn 25 as they see you as someone who has become a lower risk client. Seniors over 55-60 can often get further discounts for their age.
• Not neglecting your property when you are on holiday. Get someone you trust to open and close your curtains and remove your mail from the mailbox. They can also let the gardening serviced mow the lawn once in a while. Use timer switches to switch lights on and off when you are not at home.

Tip: Remember that you will save most when there is no crime committed, so for personal safety and financial reasons it is better to ensure that your home is a safe haven you can relax in.