1. Reducing your Insurance Premium
Go through your policy schedule carefully as there may be items that can be removed during lockdown or the cover on certain items could be changed:
All Risk items – you may be able to delete certain items that are specified on your policy. All Risks insurance provides cover for items anywhere in the world but if the items are permanently at your house during lockdown, they can be covered under the household contents section of the policy. Remember to increase your household contents sum insured by the value of the deleted specified items.
Motor – some insurers have introduced “laid up/stationary” cover. This cover can be selected if you are not using your motor vehicle at all. If you select this cover the premium will be reduced, however it is important to remember that there will be NO cover in place if you drive the vehicle as accidental damage whilst it is being driven is excluded. If your insurer is not offering this cover and you will not be driving your vehicle you can amend your cover from comprehensive to Third party, Fire and Theft.
If you delete items or reduce your cover remember to instruct us to reinstate your cover after the lockdown period ends.
2. General Building Maintenance
Insurers will not compensate you for any loss or damage which is caused by a lack of maintenance.
Now is the time to clear your gutters of fallen leaves and other debris, prune overgrown vegetation which can not only damage your building but also provide a hiding place to thieves and attend to those small maintenance jobs that you never have time for. Attending to these small seemingly insignificant tasks will not only save you money in the long term but prevent the frustration of a claim being repudiated due to “lack of maintenance”.
3. Checking your appliances
Check the wiring on all appliances - faulty electrical wiring means that loose, frayed, cracked or over-heated wires cannot conduct electricity properly. This may result in a fire, cause a short circuit, or lead to minor or even fatal electrocution. Remove the crumbs from your toaster as these can accumulate and catch fire while the toaster is being used.
4. Ensure that your sums insured under your Policies are adequate
It is extremely important to ensure that your building and contents sums insured on your policy represent the total replacement value of your assets.
If you insure an asset for less than its replacement value, you are under–insured and in the event of a claim the insurer will calculate the difference between the replacement value and the insured amount and apply this proportionately to your claim. Unfortunately this is an all too common mistake that many people make. You will be responsible for the difference. This is known as the “principle of average”.
Example: Your household contents are insured for R250 000 but the cost to replace ALL the contents in your house is actually R500 000. This means you are underinsured by 50%. If a burglary occurs and the replacement value of the items stolen totals R100 000, the insurer will pay you R50 000 as you only insured 50% of your contents. The difference may be down to underestimating the value of the assets or the product of inflation each year making the replacement cost higher that originally estimated.
Take the time during lockdown to compile an inventory of all your household contents (yes that does include all your linen, books, crockery, Tupperware – EVERY item in your house) and to work out what the correct sum insured should be based on the replacement value of the items.
The sum insured of your building is not based on the market or resale value of the property. The sum insured must represent the total cost to rebuild the dwelling should it be completely destroyed.
It is important to include items like paving, boundary walls, swimming pools, professional fees and debris removal in the sum insured.
Once you have re – calculated your sums insured don’t forget to advise us to amend your policy accordingly in writing. Before we do so we can advise you as to the impact of the revised sum insured amount on our premium payment cost.
5. Your Motor Vehicle and lockdown
During lockdown your motor vehicle is stationary for most of the time. Remember to start your car at least once a week and allow the engine to run for a while to ensure your battery does not become flat. If your vehicle is not in a garage clean it regularly to ensure that the paint work is in good condition.
6. A word of warning – Do not let your guard down!
During lockdown there have been an increase in the number of burglaries that occur during the day whilst the home is occupied. As families are continually at home it is easy to become less vigilant about keeping security gates and doors locked. Opportunistic thieves are taking advantage of this, entering the house unnoticed and stealing electronic items like cell phones, iPads, and cell phones. Remember to keep your external doors locked if you are not in the immediate vicinity.
Interested in more about lockdown and your insurance needs? NFB Insurance brokers have two other articles that may be helpful:
Your Short Term Insurance FAQ's for Navigating Lockdown
COVID-19: Riots, Social Unrest and Disorder. Are you covered?