It appears that many South Africans took the opportunity to do renovations at their homes, during the lockdown period. The hardware industry has definitely reported an unexpected boom in home upgrades, repairs and extensions.

Also, 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. It is imperative that clients check their 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.

However, if you’ve recently renovated your home, it’s critical that you revisit your insurance policies to make sure your buildings and home contents remain insured correctly.

Anything that affects the replacement cost of your home can also affect the value that you’re insured for, and the likelihood that your insurer will pay 100% of your claim.

If you’ve done a renovation or added a pool or a granny flat, your property is suddenly worth a lot more, and your policy needs to reflect the new value. The biggest mistake you can make is to be under-insured: If you’re 50% under-insured, for example, your insurer will only pay out 50% of your claim in the event of any losses.

If you’ve done some renovations or improvements, here’s what you should check when it comes to your home insurance policy. To start with, it’s important that homeowners understand the two different types of home insurance:

  • Building insurance (Home Owner’s Insurance). As the name suggests, this covers the structure of your home and its outbuildings, and their permanent fittings, against fire, damage and theft. If you own a house, make 100% sure you have buildings insurance. Regardless of whether you have a bond or not.
  • Home contents insurance. This covers your stuff. If you could turn your house upside down and shake it, what falls out is home contents – clothes, furniture, TV, wine glasses, the lot. Many people don’t have home contents insurance. Bad move.

Do a post-reno buildings insurance review

If you have a bond over the property, it’s compulsory to have building insurance. This is usually taken care of by your bank, and the premium is included in your monthly bond repayment. But you’re not obliged to accept your bank’s quote, and it’s possible you’ll get a cheaper premium from the insurer that covers the rest of your valuables. So do shop around!

Insure for replacement value, not market value

A building’s insured value is not its market value. Building insurance should cover what it would cost to rebuild your property from the foundations up, including your boundary walls, solar panels, swimming pool, taps and tiles. It should even include what you would need to pay in a worst-case scenario, like demolition charges and waste removal, and the professional and municipal fees that are part of the building process.

Review your home contents coverage

If you’ve built onto your home and filled the new extension with brand-new furniture and appliances, this is a great time to update your home contents insurance as well. As with building insurance, the key is to make sure you cover your home contents for their current replacement value – don’t guess. And remember, insurers can only protect what they know about. It helps to keep the original receipts for items like big-screen TVs so that you can prove their value if you need to claim. To help you assess your home contents correctly, here’s a handy home contents inventory.

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