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Homeowner insurance needs

With the continuous rise in the cost of living many homeowners may be looking at ways in which they can save money and ease their financial pressure. 

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that one way in which homeowners can possibly save some money is by assessing their current home insurance policies and making some changes. He adds that while home insurance is an essential element of homeownership that should not be cut out of the budget completely, there are ways that homeowners can possibly reduce their monthly premium or find lower insurance offerings through asking for a number of quotes. 
 
“As with any financial decision it is best to look at more than just one option before making the final call. Homeowners should start by phoning their current insurance provider and requesting if there is any way that they will be willing to reduce the premium. Once the homeowner has received the answer, they can then phone other insurance providers to see what are willing to offer,” says Goslett. “By comparing various quotes, homeowners will have a clearer view of all the options available to them, as well as what the products cover and provide. It will be a way for homeowners to compare apples with apples and make an informed decision.”
 
He adds that this initial step could save the homeowner money and get them the best possible insurance policy that caters to their specific criteria.  “Ideally homeowners should re-evaluate their home insurance on an annual basis, as the contents within the home may have changed over the past year. Very few consumers take the time to question their annual rate increase and don’t investigate the other options that are available to them - in fact as little as half of all homeowners do this. Without doing the necessary research it is impossible to really know if they are getting the best option available to them,” says Goslett.
 
Technological advancement has taken the tediousness out of finding numerous insurance quotes. With online search portals readily available, homeowners are able to collect information in a relatively short space of time. “In fact, many of the online search sites will do the work for the homeowner and find various quotes from different insurers without the homeowner having to change to another site or repeatedly fill out the required search fields,” says Goslett. “The internet age has made it far easier for consumers to get the information they require and many insurance brokers have the capability to assist homeowners without them ever having to leave the comfort of their own home. The majority of the hassle and work has been done away with and the process has been made as simple as possible. Once the homeowner has listed their details and insurance necessities, a list will be sent to them with all insurance providers and policies they often that match the homeowner’s criteria. The list will also include the premiums that would be paid by the homeowner for each option. This will quickly paint a picture of which provider can give the homeowner the best value–for-money policy.”
 
Goslett says that when comparing the various policies a few basic elements need to be considered:

- Does it cover structural damage –ensure that if the home is damaged or destroyed completely, the policy will fully cover the home being rebuilt. To assess how much cover is needed, check the cost of rebuilding one square metre in your area and multiply that by your home’s total square meterage. A professional real estate agent will be able to assist with these figures. Sectional title properties are covered for this insurance through their body corporate, so this applies only to full title properties.

- Liability cover – this covers injury or damage done to other people or property

- Household contents and personal property cover this includes all items inside the home that are not a part of the structure itself, such as clothing, appliances and furniture.  Certain items may be excluded or covered under other type of insurance.

- Do certain items, such as jewellery, need to be specified

“Once a homeowner has made their decision and chosen an insurance provider, there are other ways in which they can reduce their monthly premium such as upgrading their security system. The initial outlay of the upgrade might be costly, but installing a security system in the home can decrease insurance premiums by around 5% in some instances and will ensure that the occupants are safer. Improving security can also include joining a neighbourhood or block watch, as some insurers will offer reduced rates to homeowners associated with this sort of organisation,” Goslett explains.

He adds that homeowners with a good insurance track record, with little or no claims will be given preferential rates. For this reason homeowners should only claim when they absolutely have to, and rather, where possible pay for small incidents from a contingency fund. Opting to increase the standard policy excess payable when claiming can also result in the monthly premiums being further reduced, but in this case, the homeowner will have to pay out more should a claim be made.

“It is imperative for homeowners to ensure that they are covered when one of life’s unexpected incidents occur. Utilising these tips and reducing the premium rates for insurance coverage will assist homeowners to save money, while still being prepared and fully covered,” Goslett concludes.


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