19 Mar Protecting your property and its contents

Disaster can strike in an instant with a flash of lightning, an electrical fault, flooding, a mud slide – there are many situations beyond our control. In moments, everything you own, from household possessions to office contents could be lost or irreparably damaged. It is vital to ensure that your property and its contents are protected – and protected adequately so that you are able to replace what you have lost.

Homeowners versus householders insurance

Our Domestic cover offers two essential types of protection, Homeowners and Householders insurance:

• Homeowners insurance covers the exterior of your home, including additional structures such as outbuildings, swimming pools, boundary walls – essentially the bricks and mortar.
• Householders insurance protects everything inside, such as furniture, appliances, personal items and valuables.

To be totally safe and fully covered, homeowners should have both types of insurance. However, if you are renting your home, check your lease agreement as the landlord is usually responsible for insuring the buildings while you as the tenant should insure your own household items.

Keep your cover updated

It is crucial to keep your policy updated to reflect the actual market-related costs of rebuilding your home or replacing its contents. The quality of finishes, materials and items replaced should be equivalent.

Bennie Boshoff, General Manager of Safire’s Insurance Division, explains: “Numerous factors could affect building costs. What might have been a sufficient sum insured for one’s property six months ago could now be inadequate. If a property is underinsured, the owner may be financially responsible for a portion of the costs necessary to restore the property to its original state following an insured loss. It is not only construction costs that have seen a steep increase: the price of household goods has risen significantly, so replacing items such as TVs, microwaves, and furniture may be much more expensive than anticipated.”

Key measures to ensure adequate insurance cover

Several measures are advised to protect clients in the event of a loss:

• Reassess the potential building replacement costs. Ensure that your home is insured in line with what is considered the current building cost for your area. When insurers talk about the ‘building sum insured’, this refers to the estimated cost of rebuilding your home, not its market value (which may be influenced by factors such as location). Your property should always be insured for the sum that it would cost to rebuild it from the ground up, using materials, fixtures and fittings equivalent in quality.
• Include upgrades and new purchases. Any upgrades/renovations to the property need to be assessed and taken into account when evaluating your sum insured: solar panels, a new kitchen or bathroom/s, an extended outdoor area etc can add significant value as well as additional rebuilding costs.
• Include the cost of replacing appliances, furniture and valuables. Compile a list (inventory) of the household items that you would need to replace in the event that your property was damaged / destroyed. Do an online check on prices to ensure you are adequately covered.
• Include debris removal and professional fees. Confirm that your policy covers the cost of removing the remains / rubble and other debris of damaged / destroyed buildings, as well as the cost of having professionals such as architects, engineers, quantity surveyors etc sign off certain aspects that are necessarily involved in building/rebuilding a home.

Bennie adds, “We recommend that all of our policyholders conduct this review exercise and update their sums insured annually to ensure that their cover keeps pace with inflation. Contact your Safire-approved broker to ask for assistance to make sure that your home, business, and contents are properly covered.”

Please note: The information contained in this article is not offered as ‘advice’ in terms of the Financial Advisory and Intermediary Services Act 2002 as amended, and policyholders should consult with their intermediaries and the policy wording so as to ensure a full and complete understanding of the cover offered to them in terms of the Safire policy of insurance.