It's always advisable to update your household contents insurance on an annual basis and January could be the perfect month to get this done. Expensive Christmas gifts aside, most of us have bought things for the home throughout the previous year and it’s important to take stock and reassess your insurance needs.
Most insurers insist that you specify particularly valuable items separately and, in the case of electronic equipment you require model numbers, serial numbers and also the replacement value. Other items such as bicycles and antiques should also be insured separately.
It is easy to underestimate the value of the goods in your home. However, under-insuring is a real danger. If you put in a claim and the insurers believe that you are under-insured, you may only receive a proportionate share of the loss – and not the full value as claimed.
With this in mind, take the time to walk through your home, noting the contents of each room. Do not consider what you paid for the various items, but rather what it is going to cost to replace them. In other words, just because you have had a lounge suite for years and you only paid R2 000 for it on sale, doesn't mean that you shouldn't estimate what it would cost to replace the item if it was stolen or destroyed in a flood or fire.
Remember to take a long, hard look at your kitchen and include the cost of replacing appliances. Go through all of the clothing and linen cupboards in the home. Branded clothing and shoes are expensive and you may be surprised as to how much it will cost to replace these. Remember, insurance companies do not tend to verify the exact costs of items in your home when you apply for or update your insurance, they may well, however, query the amount claimed if they believe that there is a chance that you have under-insured the household contents. Keeping up to date with what is in your home and the costs of replacing the goods will go a long way in ensuring that your claim is settled with the minimum amount of fuss in the shortest possible time.
Also remember to shop around for the best possible premium. Most South Africans are feeling the pinch and unfortunately one of the first things we tend to drop when times are tough are insurance premiums. This, of course, can prove to be a disastrous decision in a country with such a high crime rate. Competition is fierce in the insurance industry and most companies are willing to negotiate better terms if the policyholder finds another insurance company that is willing to insure him for less. Old habits die hard and many who have been with the same insurance company for years will sit back and take the annual increases as a matter of course. It may be an idea to start looking at what other insurance companies offer and if there is a distinct difference in the monthly costs of the policy, approach your current insurer to see if they are willing to match the competing offer.