It’s something that we don’t give much thought to, but do you know if you have an under insured home?
An under Insured home is Asking for Trouble
- Have you updated the insured amount in the last year?
- Did you take the replacement value into account?
- When did you last re-evaluate your policy?
- Is the pay-out amount and your bond balance linked?
- Have you taken a full inventory of your home?
Not attending to these point may leave you under insured.
Act now To find out If you Have an under insured home
The problem is that the insured value of our homes and their contents stays the same. In the meantime, the costs to replace them increases. This can leave a large shortfall when it becomes time to claim.
What the Experts have to Say –
Financial planners recommend that you evaluate your policy and consider updating the cover once a year, at least. You might be surprised to know that by doing so, you could end up getting better cover at a better price.
Insurance is very much in demand in this country. Insurers are falling over each other to gain market share. This means that new products are around and benefits increased. The firms do this to stay competitive.
It’s great for the consumer. However, none of it means much if you continue to under insure your property.
How much Building insurance Do I need?
Start off with the basics – your building insurance. Do some research in your area and find out what does a similar house sell for?
What is the current value of your house? What would it cost if you needed to do major repairs? Get one or two quotes on things like replacing the geyser or replacing the carpeting.
Once you have all the information, check your current home owner’s policy. How much will they pay out if your geyser bursts? How much if your house burns down?
Be careful if you have a policy where the value is linked to the size of your bond. These are very popular because they are cheaper. When it comes to claiming, though, they pay according to the bond’s balance, not the value of the home.
Your household contents must be insured for the full replacement value. This includes items such as crockery, clothing, and linen which are often overlooked.
How much Should I value the Contents?
This is another area where mistakes are made. Let’s say the policy says R100 000 worth of cover for contents. It sounds like a lot of money, doesn’t it? Surely it is enough.
To see if it is enough, make an inventory of the items in your home. There’s the TV at R7 000, the lounge suite costs R15 000 and say the sound system is R5 000. We’re already at R27 000 with just three items in the lounge.
Go around and make a list of everything that would need to be replaced if the house burnt down. This includes the appliances in the kitchen, your clothes, all the furniture, cutlery, crockery, and so on.
Imagine that you had to start buying all these items from scratch. How much would it cost you now? R100 000 of content insurance is not a lot.
Don’t get caught out when you need your insurance most. Make sure that you have the right amount of cover in case you need to start over again.