When last have you looked at your home insurance policies?
With the ever-increasing cost of living, homeowners may be reassessing their financial situation and looking at ways to save money and cut down on costs. Ideally, homeowners should review their insurance policies as part of an annual financial assessment – as the value of your home and the content therein changes in value each year.
Thus it makes sense that your insurance cover should be adjusted accordingly.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says checking your insurance and possibly changing cover is a good way to save money.
The research may take some time and effort, but it is always worthwhile to ensure that the current policy is still the best option.
“While insurance is a necessity for homeowners, it does not have to be a financially draining burden. Shop around and see what options are available from the various insurance providers," says Goslett.
Competition in the market forces insurance companies to launch new products regularly and consistently try to find ways to undercut their competitors.
“So, while your policy might have been the most competitive when you first shopped around, it might no longer be the best policy a year later,” he advises.
Shopping for policies doesn’t need to be difficult or time consuming though.
There are centralised sites that provide quotes from different providers without you having to search on other portals.
You will be required to load your details and insurance criteria, after which you will receive a list of all insurance companies and policies that match the requirements. The list will also include the premiums prices each option. This will quickly paint a picture of which company can provide the best value.
The basic elements to check for when comparing policies include:
- Does the policy include liability cover, which will cover any injury or damage done to other people on your property?
- Check the clause for household contents and personal property as certain items may be excluded or covered under another type of insurance?
- Does the policy require that certain items be specified, such as jewellery and laptops or other electronic devices?
After comparing quotes and selecting the appropriate one, Goslett explains that homeowners could further decrease their premium by upgrading the home’s security. Adding or upgrading the home’s security can reduce the monthly premium by as much as 5% in some instances.
Certain insurance companies will also reduce their rates if you are associated with a neighbourhood watch programme.
As a final tip, Goslett explains that preferential premium rates will sometimes be given to homeowners with a low or no claim history. He recommends that homeowners only make use of the insurance policy when it is necessary. If possible, he suggests paying for small incidents from a contingency fund and to leave the insurance policy for when it is needed. Premiums can also be reduced by opting for a higher excess on claims; however, Goslett cautions that homeowners should then have an emergency savings account that can cover the excess.
Owning a home comes with a host of related expenses beyond the monthly instalment on a home loan. While the long-term investment value of a home will one day make up for these expenses, do the research to make you list of monthly expenses more affordable - starting with your home insurance.
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