This means that if any items are lost, stolen or damaged, like an electronic appliance, your DVD collection and your clothing, your insurer will indemnify you (insurers reserve the right to repair, replace or settle you in cash), for the lost, stolen or damaged items, following a valid claim*.
Bob has just moved out of his parents’ home and is renting a partially furnished flat. The only items which Bob owns are his clothes, shoes, and accessories, a second-hand fridge, some gifted kitchen appliances, his linen and bedding, and some groceries.
When moving out of his parents’ home, Bob had the foresight to get Household Contents Cover but he only insured his second-hand fridge and toaster at the price he paid for them. After a very unfortunate break-in, where all items in the flat were removed, Bob contacts his insurer to help him replace these items.
As we discussed in ‘What is Household Contents Cover and Do You Need It?’ (read it here), Bob hadn’t chatted to Quattro Sure and unfortunately he hadn’t insured his all of his belongings and included cover for his clothing and accessories, linen and bedding, the remainder of the gifted kitchen appliances, nor the groceries in his fridge and cupboards. When it is time for Bob’s insurer to pay him out, Bob realises that what his insurer pays him is far less than what it will cost to replace his fridge and kitchen appliances; but even more so, he has to replace his entire wardrobe, his shoes, his linen and bedding, and buy more food.
What Bob experienced is such a common issue, and the team at Quattro Sure see it very often. When insuring Household Content, other than remembering to include all moveable items within your home (at very affordable cover), it is just as important to remember that your items need to be insured at their current replacement value.
As Bob found out, the second-hand fridge that he purchased for R 2 000 actually cost R 6 500 to replace, brand new. Because Bob calculated the value of his Household Contents value based on the prices that he bought them for, he received an insufficient amount; therefore Bob had to use his savings in order to replace his stolen items. Had Bob insured his household contents at the correct replacement value, he would have been sufficiently covered and indemnified for this loss.
Bob was not a happy customer and was annoyed because he “paid his premium every month” and felt that he had paid a premium for cover that did not actually ‘cover’ him.
*Valid Claim: Insurers have unique criteria for what they constitute as a valid claim. Contact Quattro Sure to ensure that you understand what your policy and insurer deem and require for a valid claim to be submitted and covered.
‘What is ‘Household Contents Cover’ and Why Do You Need It?’ – read it here.
‘We have Household Contents Covered, but what if you Own a Building and Do you Need to Cover it?’ – read it here.
‘Household Contents Cover and Building Insurance will indemnify you – What happens if your items are Underinsured?’ – read it here.