Guard your home and its contents with a policy that is best suited to your insurance needs
Ahome is a very valuable asset that takes years of effort to build and own. You also willingly spend large amounts of money on timely repairs and renovation. Do you do anything to mitigate the risks that your house is exposed to because of natural or man-made disasters? If not, it's time to learn about home insurance.
What is home insurance?
This is a protective cover offered by a general/non-life insurance company against natural unforeseen disasters (fire due to short circuit, gas cylinder explosion, earthquake etc) and man-made disasters (burglary). You are given financial protection in case of any damage to your property, which can include both building and content, if you have selected a policy to cover both.
Types of home insurance There are mainly two types of home insurance policies available. These include: Building insurance: Here the building structure of your home is insured for its reconstruction value, i.e. the cost incurred to reconstruct the home. Both natural and manmade calamities are covered.
Various perils covered include: Burglary Fire, lightning, gas explosions in domestic appliances Bursting and overflowing of water tanks, apparatus or pipes Riots, strikes, malicious or terrorist acts Flood, inundation, storm, typhoon, hurricane, tornado or cyclone Damage due to earthquake, subsidence and landslide (including rockslide)
Damage caused by aircraft and impact damage Content insurance: Though this is optional, it is beneficial to opt for it to protect against the threat of burglaries and natural disasters.
Content insurance provides protection to the contents of the house that are not fixed to the home. These are covered on market value of the items and in case of loss, the insurance will be paid on the cost of purchasing the item less depreciation for usage. Under this insurance, protection against various perils are provided. These include: Valuables, such as jewellery, cameras and watches Cover against all kinds of accidental breakage of glass fixed in doors and window frames Loss/damage to domestic appliances due to electrical and mechanical breakdown Fire Storms/flooding Explosions Theft and vandalism You have a choice of buying insurance only for the building, only the contents, or both. One buys insurance only for contents when living in a rented accommodation.
Coverage Building insurance: The value of the house is the area of your house multiplied by the rate of construction per sq ft. So, if you have a 500 sq ft (46.45 sq m) house and the rate of construction is R1,000, the sum assured would be R5 lakh. Properties older than 50 years are not insured.
Also, insurance firms consider only pucca construction Contents in the house: They are assessed on the market value of individual items. This means in case of a loss, the claim value would be the cost of purchasing at that time less depreciation for usage THINKSTOCK What happens if you sell?
Cancel the policy and the premium paid will be returned to you on a pro-rata basis.
Settlement procedure Inform the call centre with policy details Furnish information like policy number, personal details, and other details regarding your claim. Then, your request is authenticated and escalated to the claims department The claims department validates and registers the request. They appoint a surveyor within 48 hours The insured submits all the relevant documents to the surveyor. The surveyor submits the final survey report along with the documents within seven to 15 days If surveyor is not appointed, the company's claims department sends a letter of requirement for submitting documents to the insured The claims department processes the claim within seven to 15 days On approval of the claim, a letter giving the approved amount of settlement is sent to the insured Payment cheque is released.
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