Home contents insurance covers everything in your house which you would take with you should you ever decide to move. Basically, if you turn your house upside down, it should cover everything that falls out. This includes your furniture, kitchen appliances, linen, clothing, electrical equipment and jewellery, etc. 

It is easy to underestimate the replacement value of your house contents. This can be an expensive oversight should something ever go wrong. What many policyholders do not realise is that if they do not insure their possessions at their replacement value they will suffer a financial loss, even if they have been diligently paying their insurance premiums every month. The emphasis is replacement value (the new prices) and not what you initially paid for it.


When you calculate how much house contents insurance you’ll need, start by listing all your belongings and work out how much it would cost to replace them new. Re-evaluate your contents at least once a year to make sure you are not under-insured.



Why is one in every three homes underinsured?


Underinsurance happens when your insured value is less than the actual replacement value of the contents of your house. In the event of a claim, your insurance will pay out on a pro-rata basis and you will receive less money than what it costs to replace your goods.

Sometimes house contents are under-insured because policyholders forget to adjust their policies as they acquire new items. For example, you could install an expensive sound system but neglect to increase your home contents cover.


Your house is probably your single largest investment. If your house burns down and you were not insured, not only would you have lost your biggest asset, you would still be faced with paying back the balance of your mortgage in full. Building Insurance (also known as Home Owners Insurance) protects you financially against loss or damage to the actual physical structure of your home caused by perils such as fire, windstorms, hail, lightning, etc.

Important: If you own a property which is financed, you are required by the financial institution to have homeowners insurance. It is mistakenly believed that it’s compulsory to have homeowner’s insurance with the bank that granted your home loan. In fact, you can take out this type of cover with any insurer of your choice. It may also be beneficial to choose the company that is already insuring your house contents, car or other assets, as the company may offer a lower premium if you insure all your assets with them.