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Know Your Policy Part 2: Household contents

This month, we continue my riveting series that I began last month. In that newsletter, we looked at all the things you need to know about your vehicle insurance. This month, it’s Episode 2: Know your household contents policy

In other words, we’re discussing your stuff, and the insurance that you’ve taken out (or perhaps haven’t taken out yet!) to protect it.

Household contents cover insures your belongings against various listed dangers (or ‘perils’ as your policy may refer to them). Specific listed perils will vary from policy to policy but generally you can expect your household contents policy to cover your belongings against fire, floods and theft. Additional perils may or may not be covered depending on your policy and on the cover you chose.

But as with most things in life, the ‘devil is in the details’ and you really need to know your policy in order to benefit from its cover.

Before I continue, remember that my team and I haven’t been inside your house and we haven’t seen your possessions, so it’s your responsibility to make sure you check your policy and make sure that it covers your stuff adequately. In particular, please study your policy wording in detail as this is what the insurer is going to use when adjudicating a claim. The policy wording will inform you of what is covered, but more importantly, it will inform you of what is NOT covered - or what is excluded - from your policy.

And now, to help you ensure that any future claim of yours is successful, here are three things you need to know about your household contents cover:

1. Know what perils are and which aren’t covered by your policy.

Perils are, to use another word, ‘dangers’ or ‘threats’. The listed perils mentioned in your policy, are the specific threats against which your insurer has agreed to cover your belongings.

It is really important that you understand exactly which threats your insurer has listed on your policy. If you suffer a loss and it is as a result of a threat that is not listed in your policy, your claim is unlikely to be approved. A very good example is “Mechanical Breakdown” of appliances and electronic devices. Very few policies cover this nowadays as this refers to items that break down due to being old or due to wear and tear. Wear and tear is a condition that is specifically excluded from cover on most policies nowadays.

2. Value your contents correctly and insure them adequately.

When you take out household contents cover, you need to supply me/your insurer with a value for all of the goods you are insuring.

It’s critical that the value you provide is not less than the actual value of the goods you’re insuring.

At the time of a claim, insurers will apply the “Average” principle if the assessor determines that you are under-insured. This means that your claim will be settled as a percentage of the value that you were under-insured for. For example, if your contents are insured for R 50,000 but should be insured for R 100,000 then you will only be paid out 50% of the claim.

On the other hand, we also don’t want you to pay unnecessarily high premiums. So this issue is all about figuring out as precisely as you can, what the actual replacement value of all your insured goods is, and taking out cover for that amount. If you need assistance with this process, or if you’d like to adjust the value of your cover, please contact my office and we’ll be glad to help.

3. Know your policy’s requirements and make sure you’re complying with them.

Do you have a lot of jewellery or even just high-value jewellery? If so, those need to be locked inside a safe when not in use. They can’t just be left lying around. If so, and they’re stolen/lost, you may not be covered. Study your policy wording or policy document if you are unsure about that.

Do you live adjacent to an open field? Do you comply with the minimum-security requirements? Your policy may include ‘endorsements’. These are basically requirements for your policy, for example that you have burglar bars or a monitored alarm system with a response service. If you don’t have a linked alarm but your policy required it, or if your alarm isn’t working or wasn’t armed, your claim is likely to be rejected.

Do you have high-value outdoor furniture? Certain policies state that you need to take out additional cover for “Goods in the Open”. So, if that expensive Weber gas braai gets stolen, then you may not be covered if you didn’t have that additional cover. Once again, the lesson here is to check your policy document and policy wording.

Do you need household contents cover?

I can offer you competitive quotes from various insurers and I’ll give you the best possible advice on which is the right fit for you. If you’d like to know more, please get in touch with me as soon as possible. I’d love to hear from you!

Conclusion I want my clients to be the best-educated policyholders out there. I hope today’s newsletter has given you some insight into your household contents cover. If you have any questions or need any assistance with getting your household contents properly insured, please get in touch.

Always covering your contents.

Stephan Kruis

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