How to insure your home when you don't own it
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Traditionally, homeownership is a step everyone supposedly needs to take at some point in their lives. However, just 35% of South Africans own their homes, and millennials in particular have been dubbed “a generation of renters”. Being able to buy a home is not something that every South African can or wants to do. However, just because you do not own your home, it doesn’t mean you cannot take steps to insure its contents.
Here are a couple of tips to make sure you protect your possessions.
Things To Consider:
“Renter’s insurance” is something of a misnomer. According to Santam’s Manager of Personal Lines Underwriting Marius Neethling, renters do not have a type of insurance that relates to them specifically. Instead, they are automatically protected in other ways.
“Technically, renters’ insurance does not exist. To insure a home, one would usually get building insurance but that only applies to homeowners. Typically, renters would need home contents insurance. Based on the definition of ‘contents’ stated in the policy wording, this would generally cover fixtures and fittings that belong to you as the tenant, not the owner of the private residence. The contents section of the Santam personal lines policy automatically provides cover for ‘Tenant’s liability,’ which provides legal liability cover to you as a tenant of a building for compensation,” explains Neethling.
What this means, for example, is that if you as the tenant put in an air conditioner or satellite dish, those items could be covered by your insurer.
What Affects the Premiums:
As with just about everything insurance related, there are several components involved in calculating a premium.
“How you are rated (and consequently what your premium will be) is determined by a range of factors that include aspects such as security, and the nature of exposure to risk. For example, it can be simple things like whether or not you have an alarm or access to off street parking. Finally, adhering to the terms and conditions of your policy is always important,” says Neethling.
There are several things, like loss, theft and collision, that are automatically covered if you already have a policy and move. In the event of theft, overturning or collision, you can rest assured that your valuables will be covered.
Neethling says, “We cover loss of or damage to your contents during your permanent move to a different address, or during transport to or from any registered furniture storage facility. Our cover is limited to loss or damage caused by theft, collision or overturning of the furniture removal vehicle.”
It is important, however, to note that this agreement is not a blank cheque. In order to be covered, the movers must be professional contractors, not just a friend with a bakkie. The contractors must also have packaged any breakable articles like glass or china and, most importantly, the damaged items must be insured under the terms of your policy.
“Before you permanently move, you should inform your insurer and ensure that your various security protocols adhere to your policy requirements,” adds Neethling.
Honesty is the Best Policy
Most importantly, you must be honest with your insurance provider.
Neethling concludes, “To save on their premiums, people will often fudge things or be a little dishonest. That is how claims end up not getting paid because, ultimately, by lying you have changed the conditions of the agreement. It is much better to be upfront and honest when initiating your policy.”