Home contents insurance 101

Home contents insurance 101

Last updated on 12th December, 2017 at 04:36 pm

How would you replace everything in your house if it was destroyed or stolen? We explain how to make sure you have the right household cover in place.

Did you know?

  1. Statistically one in three homes is underinsured by as much as 30%.
  2. By combining your home contents, building and car insurance under a single policy you could qualify for a reduced premium.

Why is one in every three homes underinsured?

Underinsurance occurs when your insured value is less than the replacement value of the total contents of your home. In the event of a claim, your insurance will pay out on a pro-rata basis and you will receive less money than what it costs to replace your property with new items.

Sometimes homes are underinsured because people forget to adjust their policies when they acquire new items or improve their home. For example, a home owner could install an expensive sound system but neglect to adjust the insured amount of their house contents. It is always wise to be insured for slightly more than the actual replacement value of your house contents, to allow for possible future purchases or acquisitions. Many people don’t realise that they cannot be negatively affected in any way if they are overinsured.

Home vs home contents insurance

Sometimes people get confused between home insurance and home contents insurance. Home insurance is sometimes referred to as buildings insurance and covers your house and other structures (ie buildings) on your premises, including any fixtures and fittings to these structures such as carpets and geysers.

Home contents insurance covers everything in your private residence and outbuilding(s) which you could take with you if you should ever decide to move. Basically, if you turn your house upside down, your home contents should cover everything that falls out. This typically includes your furniture, linen, clothing, electrical equipment and jewellery. In the event of you being the tenant, any fixtures and fittings of the private residence that belong to you and not the owner, will also be included.

Insure your house contents properly

When deciding on the total value of the house contents insurance you need, you can use Santam’s handy online inventory to calculate what the total replacement value of all your belongings should be.

Although valuable articles such as furs, jewellery, watches and articles made of platinum, gold or silver are covered as part of house contents, most insurance companies set limits to these items. This means they will only compensate you for a certain percentage of the total insured amount. For this reason it is best to specify valuable items of this nature, but also to specify items such as laptops, cellphones, photographic and sports equipment etc which are normally taken out of your home. At Santam, these items fall under a section called ‘All Risks’ cover.

Save on your insurance costs

Most insurance companies will offer reduced insurance premiums if you combine your home insurance, household contents and vehicle insurance as a package with them. Always check whether a packaged insurance policy will cost you less than individual policies.

Look after your house contents

Make sure you understand and abide by any insurance policy condition or requirements for your home. An alarm system, security gates and burglar bars are common policy requirements for home contents insurance. It’s your responsibility to ensure these systems are installed and in good working order. Take the time to read through your policy documents.

Article courtesy Santam.

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