TYPES OF CAR AND HOME INSURANCE POLICIES

Your car and home insurance policy is a legally binding contract between you and the insurer. The policy wording, proposal form and the schedule containing all the policy terms and conditions make up this contract. Mae sure you read everything together for a complete understanding of your particular policy.

The policy schedule describes exactly what you have chosen to cover. It lists your premiums (fees) and any revised terms and conditions (called endorsements) that may override the policy wording.
These endorsements may include policy extensions, exclusions or warranties.

Home owners’ insurance

  • Covers loss or damage to the buildings, walls and paving (including all fixtures and fittings) against acts of nature and specified risks.
  • Some will extend to cover accidental damage as well.
  • Alexander Forbes Insurance home owners products are issued on an ‘all risks’ basis, increasing the scope of cover.
  • The following test determines whether the item lost or damaged falls within the home owners’ or household contents section:
    • Can the fixture reasonably be removed and taken to a new home?
    • If no, then it is covered by building insurance.
  • Make sure your sum insured is enough to replace all the buildings and structures on your property or you will be subject to the average.

Within the insurance industry there are growing incidences of “average” being applied in respect of claims where people are under insured. Below is an example of “average” amount paid out in the case of a loss where a person was under-insured.

Actual value R100 000 loss R40 000
Sum Insured R 80 000(80%) Proportional pay out R32 000 (80%)

Household contents insurance

  • Cover for the contents of your home against loss or damage, usually against all risks (on an ‘all risks’ basis).
  • This section covers just about everything movable – up to stated limits – against damage caused by fire, storm, flood, theft, water leakage and accidental damage, including:
  • Furniture
    • Furnishings
    • Household goods
    • Kitchen equipment
    • Frozen food and drink
    • Televisions
    • Video
    • Computer and audio equipment
    • Clothing
    • Personal items and valuables
  • This policy usually includes cover for personal liability.
  • It is possible to insure against certain risks only for a lower premium.
  • Make sure you value the contents of your home in total: how much it would cost you to replace everything in your home if a fire burnt down your entire house? You do not want to be under-insured.

Comprehensive car insurance

  • This covers you for accidental damage to your own vehicle.
  • Includes loss by theft or hijacking. (Own Damage)
  • Covers you for damage to a third party's vehicle or injury to third parties caused by an accident involving your vehicle. (Third Party Liability)

Third party, fire and theft motor insurance

  • This covers you for loss by fire, theft or hijacking (excluding own accident damage).
  • It also covers you for damage to a third party's vehicle or injury to third parties caused by an accident involving your vehicle. (Third Party Liability)
  • Please note that if you choose this level of cover, it will be your responsibility to claim against a third party for damages caused by their negligence and this can be a lengthy process if you do not have a professional legal representative.

Third party motor insurance

  • This covers you for damage to a third party's vehicle or injury to third parties caused by an accident involving your vehicle. (Third Party Liability only)
  • If you are in an accident that is not your fault, it will be your responsibility to claim against a third party for damages caused by their negligence. This can be a very lengthy process, especially if you don’t have a professional legal representative to help you.

Combined policies

  • These policies combine all or a combination of the home owners’, house contents and motor policies into one single policy.
  • The combined policy can be extended to include ‘all risks’, ‘personal liability’ and other covers to lower the fees (by up to 30%).
  • A motor-only policy is usually more expensive – avoid taking this type of cover if you can.