What does your home insurance cover and do you really need it?
When it comes to home insurance, there are two types, buildings insurance, and home and contents insurance. When deciding which cover to take out, it is best to speak to a broker or advisor to determine the best cover for your needs.
What does home insurance cover?
According to Steven Leigh, director of Leigh Insurance, household insurance refers to all personal possessions inside your home and outbuildings. “Outbuildings, whether they are separate from the home, include garages, domestic quarters, cottages and storerooms and items insured must belong to the insured or a member of the household who lives on the premises.”
To ensure that any valuable items in your house are covered, it might be a good idea to list these specifically on your insurance policy. Wynand van Vuuren, head of legal at King Price Insurance, notes: “If you can imagine turning your house upside down, everything that would fall out should be included under your home contents insurance cover. But it gets a bit more complicated, as certain items that go everywhere with you aren’t covered under home contents insurance. Things like cellphones, glasses, bikes and hearing aids.
“Other items, such as expensive jewellery and watches, can be covered under home contents with most insurers, but they might require you to specify them, and may even prescribe how they should be stored. These clauses will differ from insurer to insurer and should always be considered when you’re shopping around for insurance,” adds van Vuuren.
When are the items covered?
You may have insurance in place, but it doesn’t always mean that you will be paid out for a claim. Leigh explains that household insurance offers protection against loss or damage to contents caused by fire, lightning, explosion, earthquake, malicious damage, storm, and flood. In addition, you are also covered for bursting or overflowing of water tanks, apparatus or pipes, as well as theft or any attempt thereat.
However, Leigh adds: “Theft from outbuildings and unoccupied buildings is subject to forcible and violent entry, or exit from the building.”
Some policies will also offer cover against incidents such as the impact of any road or rail vehicles or articles dropped from these vehicles, as well as incidents caused by horses, cattle and falling trees. “Most policies today also include cover for accidental damage insurance and power surge,” says Leigh.
Van Vuuren stresses that sometimes not all accidental damage is covered, or cover might be limited. “This will also differ from insurer to insurer, so it’s important to read the terms and conditions before signing anything. You should also keep in mind that some insurers offer emergency assistance with their home contents cover, which gives you great additional benefits such as access to plumbers, electricians and locksmiths,” says van Vuuren.
Do you need insurance?
The financial impact that a loss of items in the home, as well as damage to your property, can have is big. If you do not have adequate home insurance in place, you could be responsible for replacing all the items lost, stolen or damaged. As such it is important to have a policy in place, but it is also vital to ensure that the insured value is accurate.
“To avoid frustration and financial shortfalls in the event of a claim, the household sum insured must represent the replacement value of all moveable items in the buildings on the property,” notes Leigh.
“Unfortunately home insurance is prone to exaggerate claims. Keeping your insurers up-to-date on the most valuable items, listing them, will ensure that they are replaced. Being able to produce invoices, receipts, written proofs of purchase will also help the process if you’ve not listed the items in the policy, and being frank about the price of the item when you purchased it. Generally, though the items in the household are insured as a collective, the contents of the whole household, so there’s no need to list every single item in the house,” explains Leigh.
