The recent storms in KwaZulu-Natal and Gauteng, the Krugersdorp tornado, the Knysna fires earlier this year – all these catastrophes serve as tragic reminders of the need to be properly insured. According to the executive mayor of the Knysna Municipality, Eleanore Bouw-Spies, 50% of the homes damaged by the wildfire were not insured.

With the continued threat of severe weather, one simply cannot afford to be underinsured or worse, uninsured

“Under-insurance occurs when there is a shortfall between the amount of cover selected and the actual replacement value of what is being insured. The replacement value of goods is what it would cost you, at the time of a claim, to replace all your belongings with similar brand new ones,” says Graham Craggs, spokesperson for Budget Insurance.

To help ensure that you don’t find yourself underinsured for your home contents, Budget offers these easy and practical tips:

  1. Review your policy at least once a year – look at the amount you’re currently covered for and then follow steps two to nine.
  1. Out with the old, in with the new –  The replacement values of goods change over time so it is important to update your household inventory on a regular basis to ensure that any new items are included and to remove items that that you no longer have. It doesn’t make sense to be paying to insure your old washing machine when you have just replaced it with a new one with a higher value.
  1. Update your home inventory – once you know what’s come in and what’s gone out, you can update your inventory to ensure your current items are now reflected. Ask your insurer if they have an inventory list and use this to ensure you haven’t forgotten anything.
  1. Do some online pricing research or consult an expert– this will help you determine the current replacement cost of items in your home. Make sure to be specific with the specs, especially when it comes to electronics, to ensure the prices you get are accurate. Remember that the replacement values of goods change over time so it’s important to keep these updated.
  1. Specialised items may need specialised cover – certain items like stamp and coin collections, photographic equipment, antiques and paintings may require specific cover so check with your insurer what rules apply.
  1. Certain items require valuations –ensure that you have valuations to prove the worth of jewelry and antiques in case of a claim.
  1. Update the value of your home contents – go through your inventory and update the values of each item. Then calculate your new home contents amount and notify your insurer.

“Don’t under estimate the cost of replacing items to try and lower your monthly premiums because you could fall short if you ever need to make a claim. Similarly, avoid over estimating replacement values because this will result in you being over insured and you will be throwing money away unnecessarily every month,” concludes Craggs.

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