Household insurance

Household insurance provides cover against damages or loss to the contents in the home that you live in. In other words, everything that you would take with you when you move to another home, is what can be insured. It is also known as household contents insurance.

Cover is generally provided for the: Furniture (including carpets, rugs, paintings), Appliances (fridge, microwave, vacuum cleaner, television, etc.), Clothing, Linen, Foodstuff in the fridge and freezer, Groceries, Personal possessions (clothing, watches, glasses, jewellery, sports equipment, etc.)

The sum insured (the insurance cover) is the estimated amount of what it would cost to replace the items inside your home with a similar new one. The amount is annually adjusted for inflation and you must review the cover if a new or expensive item is added to your home, e.g. a new dining table and chairs or you upgrade your t.v.

Some insurance policies cover items that leave the home on a daily or frequent basis, e.g. laptops, cell phones etc. In some cases the insurance company may want you to specify such items explicitly. The insurance company may also want certain valuable items to be specified e.g. a stamp collection or jewellery. They may also want you to get a valuation certificate to show how much the item is worth. There might be an extra premium for these items or they might be excluded from the policy.

Most policies will pay the replacement cost in proportion to the amount you insured the items for. Replacement cost is the cost of buying a similar new item. If it costs you R5 000.00 to replace your camera, that has been specifically insured, but it is insured only for R3 000, your insurer will only pay R3 000.00 and you will have to pay for the balance.

Remember to insure your contents for the correct value. If it would cost R200,000 to replace all the items in your home, but you only insure them for R100,000.00, your insurer will assume that you have chosen to self-insure the balance of your contents. That means you are choosing to cover half of the value of all your items yourself (R100 000 / R200 000).

So, if your home has been robbed and you claim for items worth R20 000 but you have chosen to self-insure half the value, your insurer will only pay you out R10,000.00. You will have to pay the other R10 000.00 yourself. Normally insurers will pay the cost of repairing the item, if the cost is reasonable. If it is too expensive to repair, they will replace the item.

Post by SAIA


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