By: Ernest North
The start of a new year is the perfect opportunity to revisit your budget and reassess key expenses — including your home contents and building insurance. Neglecting to update your insurance can leave you underinsured, with outdated coverage that doesn’t account for changes in your home or possessions.
Here’s a checklist to help you review your coverage, avoid surprises, and stay protected.
Check your insurance cover against the value of the contents of your home
It’s easy to lose track of the value of the stuff in your home as you buy more possessions or to underestimate the value of things like the clothes in your wardrobe and the small appliances in your kitchen. The result is that you might not have enough cover for everything you own. In fact, many people only buy cover for around 55% of their home contents’ replacement value.
This leaves you exposed if you experience the loss of most of your stuff in a fire or a robbery. But it can also leave you out of pocket when you make a smaller claim. Insurers apply a concept called an average when you claim against home contents. If your things are worth R1 million, but you only bought R500,000 worth of cover, your insurer will only pay out 50% of your claim.
If your TV worth R10,000 is stolen, your insurer will cover only R5,000 minus your excess. If your excess is R2,000, you’ll only get R3,000 back. This is something many people only discover when they claim for the first time. Modern insurance providers offer online tools like AI-driven lifestyle indices and inventory calculators. Use these to check that you have enough cover.
Make sure you’re insuring for the replacement value of your contents
It’s essential to ensure your insurance covers your stuff for their replacement costs rather than the purchase cost. Inflation and a volatile rand mean that an appliance you bought for R15,000 a few years ago could cost R20,000 today. Or you might find that your iPhone 14 which you insured for R22k three years ago can now be replaced for R16k. Review your policy regularly to make sure you’re not overpaying on your monthly premium and to account for inflation or new purchases. This will ensure you have adequate protection and won’t face unpleasant surprises when claiming.
Strengthen home security
Your insurance cover might be conditional on you installing security measures like a linked alarm or putting burglar bars on all opening doors and windows. Check the security requirements outlined in your policy and ensure you’re compliant. If not, your insurer may decline your claims. On the flip side, if you add new measures such as electric fencing or CCTV cameras, be sure to let your insurer know. These might reduce your premiums. Remember to always arm your alarm and lock your doors when you go out. If you don’t and you are robbed, your insurer could have grounds to refuse your claim. Read the policy wording to check.
Secure high-value items
Not properly securing high-value items like jewellery, artwork, or electronics can lead to higher premiums. Insurers may require additional coverage or raise rates if valuable items are not stored safely. If necessary, invest in a safe for these valuables.
Specify your portable items if necessary
Some home contents policies cover portable items (things that you can take out of your home like laptops and cameras) at home, even if you didn’t specify the item individually. But you will need to get extra cover to insure them for use outside your home. Other policies won’t cover easily portable items even inside your home unless you specifically add them to your policy. Read the details in your policy wording and make sure you provide the necessary info.
Update your insurer about home improvements
Renovating your home or adding new features like solar panels without telling your insurer can lead to gaps in your home building cover. Check that you’ve informed your insurer about any home improvements that increase the value of your home.
Look after your home and its contents
Most insurance policies expect you to take some basic steps to protect your home and items from damage and theft. Your insurance provider might not pay if it finds you were reckless or negligent. Leaving your expensive tools lying around in the garden with the gate open, for example, might give the insurer grounds to reject a claim if they are stolen. Failing to address home maintenance issues (like leaks or mould) can lead to claims down the line. If damage results from neglect, insurers may raise premiums due to perceived higher risk. Make a list of good security habits and home maintenance tasks to stay one step ahead.
Make a note about your renewal date
Keep track of the renewal date for your policy, when the premium will generally go up. Many insurers will impose an above-inflation increase, so it pays off to shop around to make sure you’re still getting a good deal. You will often be able to get a better premium price from your existing provider if you query the increase. Or you can consider switching to a digital insurance provider like Naked that offers an instant, transparent online quote with no need to negotiate with a call centre representative.
* North is a co-founder of the digital insurance platform Naked.
PERSONAL FINANCE