Review your insurance policy

It’s back to business as usual for most south Africans and we are focussing a lot on what your financial resolutions should be and, as mentioned in our Financial Resolutions article from Wednesday, reviewing your insurance cover is on the priority list.

The reality is that short-term insurance cover has to be reassessed to ensure that individuals are neither under- nor over-insured,” said Richard Gray, chief executive of Harcourts.

“A person who is under-insured will receive a smaller payout from the insurance company in the event of a claim while anyone who is over-insured will be paying premiums that are inappropriate for the cover.”

Experts recommend that every homeowners, or tenants who take out insurance cover, should put together a detailed inventory of goods that are insured – this needs to be done on a room-by-room basis.

Some insurance companies don’t need a detailed inventory, but it is a recommended that you have one anyway since this gives you a clear idea of the value of your household contents.

 “Serial numbers for high-risk items such as electronic goods, computers, television sets, cellphones and so forth should be noted and kept record of,” Gray added.

“Many people do compile such a list but keep it on a computer and, when the computer is stolen, the numbers disappear with it.”

“Special items, such a custom-made jewellery, expensive diamond rings or watches should be insured separately and the current replacement value – preferably via a valuation certificate – should be kept as well.”

After a detailed inventory has been compiled, homeowners should get in touch with their insurance company and find out what the premium adjustments will be. In most cases, insurance companies will simply add an inflation-related price increase to the premium.

It’s important to consider that new items that were acquired during the year need to be added to the policy, so that these can be covered in the event of theft or, in worst case scenario, a total loss as a result of a fire.

“It is advisable for all homeowners to keep a copy of the complete inventory away from the home so that in the event of a total loss there is a record of the goods that were insured and their approximate value,” Gray concluded.