Many people were left devastated as a result of catastrophes that took place across the country in 2017.
From the devastating Knysna fires in June to the storms that wreaked havoc in Gauteng and Durban in October. Many homeowners were affected.
The damages caused by these natural disasters were reportedly valued at billions of rands. The aftermath was a massive financial loss and a tremendous psychological effect on those affected by it.
Aside from the economic loss the catastrophes resulted in, they also revealed a serious problem in the South African economy in general and the insurance sector in particular.
Even with a multitude of beneficial insurance offers available in the market, many homeowners in the country do not have any insurance policy at all.
Looking at the Knysna fires, for instance, the amount of economic loss recorded by homeowners is enormous.
The bustling seaside town was unfortunately razed to the ground by the incident, with approximately 600 homes totally destroyed and over 10,000 people displaced, resulting in economic damage valued at R4 billion.
It was found that more than half of the homes affected by the fire had no form of home insurance cover at all.
This means that the owners will not receive any form of economic compensation aside from emergency relief materials.
It was also found that among the houses that were insured, a good percentage were underinsured, meaning that the owners will still incur a significant amount of loss.
Looking back at these events we can always learn from the mistakes made by others and avoid unforeseen losses in the future.
Here are some lessons most homeowners can learn from these recent disasters:
You Need Insurance Cover
Most people make the mistake of believing that they will possibly never experience any catastrophe. The fact remains that disasters are somewhat inevitable and can happen to anyone very unexpectedly.
We are surrounded by risk factors no matter how prepared and safe we might think we are. The best way to comprehensively handle this risk is to get the right insurance policy. Losing your home or property can be devastating, but with the right insurance cover, the amount of economic loss you will incur will be reduced significantly.
Do not take the risk of leaving your property uninsured with the assumption that disasters seldom occur.
Your Insurance Policy
Another fact that was discovered as a result of the catastrophes was that many who had insurance policies were underinsured. What makes the situation worse is that these people have little knowledge of the inadequacies of the policies they signed up to.
Losing your house and discovering that the insurance policy you have does not offer adequate coverage and finding out that the rebuilding and replacement costs will not be completely covered can be horrific.
This will certainly compound your misery, which is why it is essential to do your best to avoid such surprises.
Pay attention to the following details of your insurance policy:
1. Be Certain of the Insurance Policy Clauses
Your insurance policy is a 'safety net' that will present some benefits when the unthinkable happens. These benefits vary depending on the insurance option you choose.
Do not make the mistake of going for the cheapest available option. Normally, this option comes with minimal benefits and you may be surprised by the insignificant benefit it avails when a dire need arises.
Evaluate your insurance needs with the help of an expert insurance broker and choose a policy that covers all the essentials. It may come at a higher premium, but the benefits will make up for it when a need arises.
2. Be Sure Your Policy is Up-to-Date
The value of your property does not remain the same year after year. We all add items to the overall content of the property and this increases the value.
This also implies that your insurance needs do not remain the same over time. To make sure that you have the right level of cover at any time, take accurate inventories annually and use it to determine the value of your property.
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3. Excess Payment
Take note of the excess payments you agree to as it is a critical part of insurance that will play a significant role when it is time to apply for a claim.
As much as possible, choose lower excess payments since it will have a minimal effect on you.
At the time of dealing with the physical, financial, and emotional challenges associated with damages to a property, a lower excess amount (which is affordable at this point) will help you tremendously.
4. Maintain a Home Inventory
A home inventory lists your possessions and their value in a detailed format. Aside from the fact that it will help you to estimate the level of coverage you need, it will also be helpful when you are making insurance claims.
With the inventory, the process of valuation and settlement by the insurers will be a lot smoother and quicker.
The recent disasters that befell many in South Africa did not only show the unpredictability of the weather elements and the devastating effect of natural disasters, it also showed us that there is a lot we can do to reduce the amount of loss we might incur in the event of a disaster.
Learning from what happened to others, homeowners should endeavour to obtain the right insurance policy for their properties. If you are still not sure of how to go about it, consult a reputable insurance broker in South Africa for professional assistance.