The fire that destroyed the Houses of Parliament in Cape Town last month sadly highlighted the fact that certain basic, and very necessary, steps had not been taken to ensure that the property was well-maintained and covered for any potential disaster. This is a cautionary tale that also applies to property owners, who must ensure that their private residential homes are kept in good order and covered comprehensively to mitigate any potential financial losses.
1. Ensure you have adequate Building Insurance
Building insurance covers homeowners from structural damage caused by fire, extreme weather or burst geysers and pipes. Interestingly, it also covers the replacement of keys, locks and remote control units, and accidental breakage to fixed glass and sanitaryware.
A building’s market value isn’t the same as its insured value and the amount insured should cover the cost to rebuild your home if you had to. Buildings insurance should cover what it would cost to rebuild your property from the foundations up, including your boundary walls, solar panels, swimming pool, taps and tiles. And if you’ve made major improvements to your home, such as adding a new room, tell your insurer, or risk being underinsured.
2. Check your Home Contents Insurance
With up to 60% of South Africans being underinsured, make it a priority to check that your home contents policy covers the current replacement value of your household goods, and not what you paid for them. High-value items that are only kept in the house should be covered, but the moment you take any high-value items outside the house, they must be included under your portable possessions cover (specified all risks), or they’re effectively uninsured. This includes phones, laptops, jewellery, watches, sunglasses, clothing, your gym bag and its contents, and luggage, for example.
The best advice would be to review your contents insurance annually to ensure you remain market price related and to ensure that if you buy any big-ticket items that you account for them. Another tip is to keep all your receipts and take photos of your very expensive items.