Household Insurance
Household insurance is a form of risk management primarily used to protect you against the risk of a contingent loss to the contents of your home. The premium you pay insures the contents of your home, including furniture, books, electrical appliance and personal effects.
In South Africa the short term insurance that covers risks against the contents of your home is often called personal lines insurance.
It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.
It requires that at least one of the named insured occupies the home.
The payment the insured makes to the insurer is called the premium. The insured must pay the insurer the premium each term. Most insurers charge a lower premium if it appears less likely the home will be damaged or destroyed: for example, if the house is situated next to a fire station, if the house is equipped with fire sprinklers and fire alarms.
In South Africa significant savings can be made if security systems are installed and these are linked to an armed security response service.
If you have house contents insurance, you enjoy full cover for contents inside and limited cover for contents outside your building.
These contents may include the personal effects of guests and domestic employees, money, contents of refrigerators and freezers, mirrors and certain glass.
Depending on your policy wording this may also include cover for storage costs for contents after damage, rent, fire brigade charges, medical expenses not otherwise covered, compensation for your or your spouses death, trauma treatment, veterinary expenses and guards to safeguard your home after the occurrence of an insured peril.
For your household contents, you should draw up an inventory using an inventory form. You can also employ the services of a professional company specialising in the valuation of household contents.
All Risks Insurance
All Risks insurance covers you for the loss, theft or damage to items you normally carry with you outside your home. The limit (amount) of your cover is stated in the schedule.
Basic options for all risks cover are: clothing and personal effects; personal documents, coin or stamp collections; transport of groceries and household goods; keys, locks and remote control units; wheelchairs; bicycles; cellular telephones; television sets, video recorders, decoders, video cameras; computer equipment and items in a bank vault.
If you choose the option clothing and personal effects, most comapnies provide cover for loss or damage to clothing, spectacles, contact lenses, hearing aids, cosmetics in their cases, jewels and jewellery, watches, furs, umbrellas, handbags, electronic dairies, binoculars, fire arms, sports equipment, portable photographic equipment, etc.
Take note that most companies will not pay more than a certain amount or percentage of the insured amount, which is stated in the schedule under clothing and personal effects (whichever is the greater), for any one article, pair or set.
If an item is worth more than the given amount stated on the policy schedule, the item should be specified.
Specify and Save
Items that need to be specifically insured are items that you normally wear or carry with you which are of high value and which are exposed to a higher risk than the rest of your items.
Insureds who specify items such as jewellery, cameras and expensive leather jackets under the All Risks section of their policy can achieve considerable savings if they have to claim. Such specified items are not subject to the payment of an excess.
Combined Car, Household and Homeowner policies save you money
These policies combine all or some of the home owner insurance, house contents insurance and motor insurance policies into one single policy.
The combined policy can be extended to include other insurance features such as all risks, personal liability.
The benefit of a combined policy is that the car insurance rates can be discounted (by as much as up to 30%) due to the low-risk sections (building/house contents) being included and the policy being viewed as a whole.
A car insurance only policy is usually more expensive and should be avoided unless completely necessary.
Household Goods Covered
Provides cover for the Household Goods against various occurrences as defined:
Cover - the contents of your home are covered against:
- Fire, Lightning, Explosion
- Theft
- Storm, Flood, Wind, Rain, Hail or Snow
- Earthquake
- Bursting, leaking or overflowing of water apparatus, pipes or fixed oil-fired heating apparatus
- Damages caused by impact to your home
- The contents are covered for their current replacement cost providing the sum insured represents the total value of all contents at current replacement values.
No Claim Bonus
Many companies reward policyholders for not claiming for minor losses. For example for every year that you do not claim you may be entitled to a No Claim Bonus that provides you with a reduced monthly or annual premium.