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House Contents Insurance – more than just an afterthought

By Kayser Baird | Durban | March 28, 2013

Many South Africans, particularly younger people consider House Contents cover to be an add-on to their vehicle insurance and a way to keep their vehicle rates low. Insurance companies provide cheaper rates on your car insurance if you include house contents cover on your policy and as a result, people will often just add the minimum sum insured for the contents of their home.

Being under insured for House Contents places the policy holder at significant risk, because the insurance company will apply average in the event of a claim and the amount paid out could be significantly lower than the amount of the loss. Another factor influencing under insurance for house contents cover is that people usually underestimate the value of their house contents, or do not take all of their contents into account when calculating their sum insured.

Your belongings in your home must be insured at replacement value, and ALL of your contents must be taken into account. Your insurance company cannot afford to collect premium on only a portion of your contents value but pay you out in full in the event of a claim. What is important to remember, is that the principle of average will apply even if you have a small claim.

In other words, if you house contents are worth R500,000 at replacement and you are insured for R250,000 – if you have a R20,000 claim you will only be paid out R10,000.

house contents insurance

Other factors to consider;

The best way to establish if the cover you have on your policy is correct is to let us review your cover with you, so that we can find out your particular circumstances and needs and structure your policy in a way that suits you.

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