Insuring things other than your car

INSURANCE IN AND AROUND THE HOME

Homeowners Insurance (the Building)

This covers the cost of repairs to the home (not maintenance) in the event of a catastrophic disaster, fire or “act of God” e.g. hail, flood, fire, tornado, hurricane, earthquake, tsunami. It will also cover the cost of repairs in the event of a burst geyser, broken windows, domestic accidents (bath overflow and wooden floors are damaged).

I own my own home. Is homeowner’s insurance mandatory?

Just like for motor vehicles, it is not mandatory to have homeowners’ insurance unless you have a home loan (bond).

Home owner’s insurance is normally included in the monthly bond or mortgage payments; however, it is a good idea to shop around as insurance via a broker will often be cheaper and just as good or even better than that offered by the lender.

I am renting my place. Must I have homeowner’s insurance?

Generally, speaking, it is the owner of the property that must insure it against loss. Occasionally landlords may put provisions in their lease which relieve them from their obligations that would normally be covered by homeowners insurance, in particular the cost for you to relocate and have temporary accommodation if the property you are renting is damaged. Watch out for this and ask the landlord to cover you in terms of their insurance policy.

Householder’s insurance

This type of policy covers the contents of your home, against theft, damage (electrical, lightning, burst geyser) or breakages (only specified items e.g. Ming vase) or in the event of a catastrophic disaster or “act of God”. This policy does not cover structural damage.

A simple way to establish just how valuable this policy is, is to do an inventory of everything in your home, every cup teaspoon, piece of clothing, etc. and then do a costing on what amount you would need to pay to replace everything in the event of a fire or burglary.

You can download a handy Excel sheet to help you do this here:

INV - insurance inventory

.xlsx

Download XLSX • 25KB

It is a really good idea to take a picture of your more valuable items, including their serial numbers. When buying something new make sure you do this and store it on a cloud drive.

TIP 1: Do not be tempted to insure your property for less than it is worth. If you lose everything such as in a fire the insurance will only pay out to the total of the amount insured. Good and well but if you have a partial loss they will assess the value of what was not damaged as well as the items that were lost and if this does not add up to the sum insured at replacement cost, they will only pay you out a percentage of your loss, based on the percentage you were under insured. They will not adjust in the other direction if you were over insured – the principle behind insurance is that you must be placed in the same position that you were in before the loss occurred.

TIP 2 : Update your inventory at least once a year; prices change, and you could end up being under insured due to inflation.

All risks insurance

This type of insurance is usually sold with a householders’ policy but is in fact a special kind of insurance for items that are made to wear on you eg jewelry and clothes away from the risk address. You can also specify items like camping equipment. It is a very good idea to have an all risks policy for items that are of high value and that you take away from your home in the normal course of events. Laptops, cameras cell phones and expensive jewelry are all good examples of such items. If the item is lost or damaged during a trip you will be covered for the loss. Some all-risks policies will also cover items such as baggage and money when on international travel.

TIP 1: Depending on the insurer you may need to specify the items under the all risks policy. If this is the case it is essential that you notify your insurer whenever you purchase or replace one of the articles.

TIP 2: If you take general all risk cover there will be an item limit, make sure you know what this item limit is

Cell phone insurance

Cell phone insurance covers the replacement or repair cost of a cell phone if it is lost, stolen or damaged. Generally this policy is sold by Cell Phone Service Providers at the time a contract is signed.

Perhaps one of the greatest insurance mistakes that people make is to take out cell phone insurance while at the same time having an all risks policy. It is almost always cheaper to simply add the phone to the all risks policy.

Other types of insurance

Travel insurance

This is a specialised policy that protects you from losses and medical costs while travelling out of your home country. The policy will pay out your medical costs and also cover you for inconvenience due to delays and cancelations and also cover you against the loss of your money or luggage.

TIP 1: Almost all credit card issuers and most medical aids will give you free travel insurance if you pay for the trip with your card (or are a member of the medical aid). The cover offered will be adequate but may be topped up at the time of registering. IMPORTANT: Just because you paid with your credit card does not mean that you are insured. It is normal that you have to still apply for the free policy before your trip.

TIP 2: if your luggage or items that you took with you on your trip is stolen or damaged, report it in the country that it happened to the police as proof to the insurance what happened.

Pet Insurance

Pet insurance covers you in the event that your pet needs life-saving treatment.

Policies vary, but most include cover for Vet’s fees, accident and illness-related incidents. If you have pets it is a very good idea to look at this as you will pay a fixed amount each month to keep them happy and will never be faced with the terrible decision to put a loved cat or dog (or horse) down because of a lack of funds for a treatable condition.

Moving Insurance

When relocating your home, it is highly advisable to take out moving insurance. This will cover you in the event that something happens to your possessions during the move. Most removal companies will offer you such insurance, but it is a good idea to shop around for the best price. Your insurance broker will be able to assist you.

Other types

You can insure almost anything and there are specialised insurers dealing with anything from body parts to boats. A good insurance broker will always be able to source cover for your needs.

Thanks

Our thanks to the team at In2Insurance for their help with this post. In2Insurance provide a comprehensive range of insurance product and great service.

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