Do you have it covered?

With the increasing cost of living, utilities and expected interest rate hikes in the near future, many homeowners may be relooking at their financial situation and deciding where they can save money or cut costs. 

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that one way that homeowners could save money is by looking at their current home insurance policies and perhaps changing or altering their cover. He notes that while home insurance is an essential aspect of homeownership, it does not have to be a financial burden and there are ways in which homeowners can obtain lower insurance quotes. 
According to Goslett, as with all financial decisions, it is vital for homeowners to compare various quotes from different insurance companies to see who can offer them the best cover for the best possible price. “The homeowner can either phone the insurance companies themselves if they offer direct insurance options, or use the services of a broker who will assist them in getting numerous quotes to compare. Getting a number of quotes will allow the homeowner to see what cover is available and the range of products each service providers offers,” says Goslett. “Just this one step could save the homeowner money as it could assist them in finding a cheaper option that provides as much, if not more, cover. It is a chance to compare apples with apples and see what comes out on top.”
He notes that consumers will often accept a rate increase on their insurance policy without questioning or researching whether there are cheaper options that still cater to their specific needs. “While it may take some effort, it is always good to check whether the current policy still meets all the requirements and offers the best value. New insurance products come onto the market regularly and in order to be competitive in today’s business environment, insurance companies are finding ways to undercut their competitors and offer their clients good products at lower rates. Approximately just half of all homeowners investigate their policies when they are increased to see if they are still the best option. Without putting in the research it will be impossible to know what the best option really is,” says Goslett.
He says that it is generally a good practice for homeowners to review their home insurance policies every year. This is due to the fact that both the property’s value along with the value of its contents may have changed over the 12 month period.
With the advent of modern technology, collecting insurances quotes from various providers has become a relatively easy process. “With online search portals homeowners have all the information they would require at the click of a button. In fact, some online sites will provide homeowners with quotes from different insurers without them having to go onto another site. For the most part, the work of finding the quotes has been taken out of the process and made as simple as possible. After the homeowner has loaded their requirements and details into the site, a list will be provided to them with all insurance companies and policies they offer which 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,” says Goslett.
He provides a few basic elements that homeowners should consider when comparing policies:
Check for possible liability cover. Liability cover is for any injury or damage done to other people or their property, where the homeowner is at fault.
Look at the cover for household contents and personal property. This pertains to all items inside the home that are not a part of the structure itself. These items would include all appliances, furniture and clothing. An inventory will need to be complied to assess the level of personal cover required. Check this clause carefully as certain items may be excluded or covered under another type of insurance
Check if there are exclusions to the policy or certain items that need to be specified such as jewellery and laptops/other electronic devices.

According to Goslett, once a homeowner has compared their options and has made their choice of insurance provider and policy, there are still further ways to decrease the monthly premium. “Upgrading a home’s security system can reduce the monthly insurance premium by as much as 5% in certain instances. Some insurance companies also provide reduced rates to clients who are associated with a neighbourhood watch or block watch programme,” he says.
Many insurance companies will also offer preferential premiums to homeowners with a low or no claim history. For this reason, Goslett advises homeowners to only make use of their insurance policy when it is absolutely required. If possible, it is better to pay for small incidents from a contingency fund and leave the insurance policy for when it is really needed. Opting for an increased excess amount can also assist in reducing the monthly premium; however this option could prove costly when it comes time to claim. He notes that seeking the counsel of a professional financial adviser could help homeowners who are unsure of anything and need some guidance with regard to their insurance policy options.
Goslett concludes by saying that while a home insurance policy is vital, paying exorbitant prices for it is not. Making use of the above tips and reducing the monthly premium amount will ensure that homeowners can save money while still having their property adequately covered for unexpected incidents.

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