What is the meaning of average?
The recent devastating fires that have destroyed so many parts of the beautiful Knysna area have left many people homeless and without the possessions they have accumulated over many years.
Some items have sentimental value and these cannot be replaced however, most people were expecting to have homes and contents replaced by their Insurers. What a shock for so many people who have now discovered that they are under-insured.
Insurers have applied “Average” to many of the Knysna claims and in simple terms – this means that the percentage of under insurance established at claims stage is deducted from the claim settlement value. In the event that you are found to be 50% under-insured – you would walk away with only half of your claim being paid out.
Who is to blame and how is this rectified before a claim happens? Let us all learn from this awful experience. Each year Insurers will call for both Building and Contents sums insured to be increased at renewal time. However, this is to offer some protection against inflation….Rand/Dollar fluctuations……increased import costs etc and the onus to have the correct sum insured will still fall on the Client. Your Broker needs to guide you, however, they are not professional valuators and best advice will always be to have your home and contents valued by a professional. If done by a reputable Valuator, this exercise will serve as the basis for correct values and will not need to be repeated each year.
Buildings need to be valued at current rebuilding costs including Demolition Fees, Architect Fees etc. This is a difficult sum insured to reach for anyone not working in the Building Industry. Household items (including jewellery, collections of any kind, artwork, Dvd’s and CD’s etc) should be valued at current replacement costs. All moveable items must be included in this sum insured.
We urge all Clients to consider the above and take action to avoid the trauma being experienced in Knysna. We are able to supply you with a list of Valuators you may consult or you would be able to source someone yourself.
We are here to assist you as much as possible so please do not hesitate to call our office if you have any concerns or wish to discuss this in more detail.
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