You only need to pick up your local newspaper, or eaves drop on a conversation at your corner coffee shop, to realize that just about every second person in this country has been affected by crime, in some way or another.
House break-ins are a dime a dozen, nowadays, and while we all think we have that eventuality covered (we have insurance in place), the fact of the matter is that thousands and thousands of us are horribly underinsured.
Let me let you in on a little secret, something your insurer isn’t always going to tell you about.
Let’s start off by painting a picture.
You’ve been away on a lekker long weekend, with the family. You roll back into Joburg, on Sunday night, and as you pull up the driveway you can automatically sense that something is wrong. Your greatest fear is confirmed the minute you push the front door open.
You’ve been robbed!
Anyone who has ever suffered a robbery knows what an awful feeling it is. It’s less about the “things” that have been taken, and more about the actual invasion of your privacy, right? I mean, things can always be replaced, that’s why you have household contents cover in place.
08H00 the next morning you are straight on the buzzer with your insurance company, lodging the claim, and after the conversation you feel a little better about the whole thing. But, 30 minutes later your cell phone rings and it’s the insurance assessor who has been assigned to your claim:
“It’s standard procedure, Mr Black, I will be around to your place tomorrow afternoon at 15H00.” No problem, you think to yourself. The quicker the insurance assessor gets this wrapped up, the quicker you can get your hands on some new goods.
The next day the assessor is at your place, and, having finalized his report, let’s the insurer know that he believes your loss is R650 000.
But hold on a second, how much are you insured for in your policy schedule? You start scratching around in your study and finally find your policy document. Frantically you thumb through to the section of your contract, containing the amounts your are insured for.
R325 000 (this, however was the value of your household contents 5 years ago when you took out the policy)
Now you are starting to sweat a bit…
The value stated in your policy schedule is exactly 50% of what the assessor has determined the loss is. Is your insurer going to pay out the R650 000?
No way Jose!
But is your insurer even going to pay out the R325 000 stated in your policy schedule?
Well, the “now” is that you are underinsured and your insurer is going to apply “average”. Because you are 50% underinsured, your insurer is only obliged to pay 50% of your claim.
• No R650 000 pay out
• No R325 000 pay out
• Only a R162 500 pay out
Don’t be one of thousands of South Africans who underinsure their household contents, only to learn the toughest lesson when it comes time to claim. Rather, complete an inventory of your household content (each year), make sure you insure your possessions/content for the right value and sleep easy at night.
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Until next time.
The InsuranceFundi Team