Avoid nightmare of underinsurance
BEING underinsured can be more horrifying than a Halloween costume, and definitely more expensive.
Recent events from the storms to the fires around the country are an important reminder of three essential types of short-term insurance cover.
The structure of your property needs to be adequately insured, which should not be based on market value but rather the cost of rebuilding after a devastating fire, storm or flood.
If your property needs to be rebuilt and you do not have sufficient insurance, the costs can be beyond scary.
The rebuilding value of your property has to be kept up to date, and it is your responsibility to make sure it is.
If your home needs to be rebuilt after any insured loss or damage, the replacement cost must include VAT, professional fees, demolition costs, clearing, erection of hoardings, municipal scrutiny of plans, or the fees and costs of architects, quantity surveyors, consulting engineers and alternative accommodation.
This is an expensive and complicated process and being underinsured will make the experience all the more horrific.
From your brand-new television to your secondhand furniture, if every item in your house were to be damaged in a fire or flood, or a few expensive items stolen, these are pricey to replace.
It is essential to have the value of your contents regularly updated.
You need to work out the replacement value of everything from your couches to your clothing in line with what it would cost you to buy these items again.
Share these updated values with your adviser or insurer, including photos or valuation certificates of specific items.
Your contents cover includes portable possessions such as your cellphones, laptops, cameras and other items that you might carry with you.
This cover even extends to having these items with you overseas.
You do, however, need to supply information such as the make and model of these various items.
All-risk cover should be mentioned to eliminate any confusion around cover provided inside the house or when you are out and about.
You then, however, need to supply information such as the make and model of these various items you wish to insure more specifically.
The replacement value of your contents may change from year to year if you buy new things, as well as inflation pushing up the costs.
It may cost you an extra R1 000 to replace an item in your home, so make sure your sum insured is updated accordingly.
Failing to do this will mean if you need to claim, you may not be paid out sufficiently to replace your contents.
It goes without saying that having your car insured is obviously a good decision – not only to insure your own losses or damage, but also losses or damage your car may cause to other vehicles, property or people.
It is always important to consider proper cover, but vehicle liability must always be considered as the most important basic cover due to the financial impact that claims against you may have.
Always make sure that correct drivers are noted, use is correctly indicated, vehicle safety requirements are maintained, and overnight parking is noted.