Household insurance is more than a “Nice-to-have”, it takes a lifetime to build up a collection of prized possessions so it’s important to ensure that you have enough financial support to repair or replace them if they get lost, damaged, or stolen. Protection for your house in the form of security systems and gates needs to be combined with homeowners and contents insurance. Home insurance helps protect that investment — and you — in a variety of ways.
What exactly are home contents?
People sometimes confuse household insurance (or home contents insurance) and building insurance (also called homeowner’s insurance). A simple example to know the difference is to think of the difference between the owner of a rental property and the tenant. A tenant owns all the furniture inside the house, whereas the owner (landlord) owns the actual building structure and everything around it.
The home contents should therefore be insured by the tenant and the actual structure by the landlord. Thus everything inside a house is known as its contents, and everything that is fixed – from a garage and pool pump to walls, fence, and geyser – falls under building insurance. If you were to turn your house upside down, everything that falls out should be covered by home contents insurance!
Remember: Building insurance doesn’t include home contents insurance in South Africa. So, if you are renting, always get your own home contents insurance. If you are a ‘rentrepreneur’, you will also need household insurance and additional cover against accidental damages and liability.
What does home content insurance cover?
Home contents insurance covers everything in your house against theft, fire, malicious or weather damages (storms, flooding, lightning). If you would like these items to be covered for accidental damage as well – e.g. if you spill coffee on your expensive sound system – then the additional optional cover can be taken out, insuring your guests in case of accidental property damage.
The personal items you carry with you such as your handbag, clothing, sporting equipment, etc are typically covered under ‘all risks’. However, when it comes to tablets, cell phones, jewelry, laptops, and bicycles, you need to specify the items in your policy. Specifying items means that each item will be listed with its model or serial number plus its value.
Various insurance companies provide an option for homeowners to ensure the contents of their homes against the risk of theft. Contents insurance applies to anyone who owns something valuable, ranging from your television set to your favorite painting or a cellphone.
Your refrigerator, couch, and clothing are important items to have covered under content insurance. Consider how expensive it would be to replace any of these items if you were to fall victim to crime, fire, or a natural disaster.
You do not have to run the risk of being without financial support if things go wrong regarding your property. Keep in mind that you need to protect your assets, do not only insure a portion of your belongings but instead make sure you are 100% covered.
Failing to do this means you could be underinsured, which means if you need to claim, you will be proportionately paid out. Also note that if you are renting a home, it is just as important to have cover for your belongings as your landlord is not liable if your television or laptop, for example, are stolen.
Be sure to stay on top with home contents insurance valuations
“Many people only evaluate their home contents when they take out insurance but forget to update the value over the years. That’s why statistically one in three homes are underinsured by as much as 30%,” states Santam Insure. Should you need to claim, your household insurance will pay out on a pro-rata basis and you will receive less money than what it costs to replace your goods.
When investing in property one of the most important things to consider could be home insurance. Considering the investment made on the property purchase, buyers need to ensure that the home and contents are sufficiently covered to avoid costly surprises in the event of loss or damage.
