Picture this: You’ve just come home from a wonderful weekend away from it all.  You push open your front door and put down your bags.  But just before you can say, “Home, sweet home!” the chaos around you tells you there’s been a burglary. Your next thought will probably be: “Thank goodness I’m insured!” But are you really certain you’ll be paid out as much as you expect? If you have insurance, keep reading…

1. The insurance contract you sign is legally BINDING.
Well firstly, you need to know that when you sign an insurance policy agreement you are actually entering into a legal contract between yourself and the insurance company. This contract will state what is protected, at what price, subject to which terms and conditions – and what is not covered. You wouldn’t sign any other legal contract without going through it thoroughly, so don’t just sign on the dotted line of your new insurance policy without being fully aware of what you’re agreeing to.

2. If the information you give isn’t 100% accurate you could be paid out NOTHING.
It’s your responsibility to give the insurer the correct information and make sure that the policy documents reflect your details correctly. Also, if you aren’t honest about the nature of the risk – for instance, if you say you have an alarm with armed response and it transpires that there is no such alarm, the contract will be regarded as useless and you won’t be paid out for your claim. Or if you under-value your goods, you may only get paid out a proportional amount of actual value.

3. If you don’t fulfill the conditions of insurance it will be to YOUR detriment.
The conditions of insurance are particularly important – this is what must be done from your side to ensure future insurance claims will be paid out?  For example, some insurers require you to fit a satellite tracking device to your car, or have a certain type of anti-theft system. For household insurance, the insurer may specify that you must have an alarm system and burglar bars on every opening window in your home.  In the event of a burglary, if it turns out that the small window in your bathroom was never barred, the claim may not be paid out. Some insurers may be lenient, but others will stick to the letter of the law.

4. You need to keep your policy up to date!
Don’t assume, for instance, that if your cellphone is insured, you are insured for all subsequent cellphones. Your policy may actually specify the make and model of the cellphone, and if you upgrade and get a new cellphone, your new unit may not be covered.

5. If any of your belongings are stolen outside the home you won’t be covered.
Staying with the cellphone, will it be covered if it’s stolen from your desk at work, or from the table in a restaurant? When it comes to insurance companies, theft and burglary are two very different things. A burglary is where there are visible signs of forced entry into your home. Theft is what happens to an asset outside of your dwelling. Insurance cover for items taken out of the home – cellphones, laptops, cameras, jewellery etc. – is an optional extra and costs extra.

6. The lower your payments the higher your excess.
Make sure you understand what ‘excess’ means. Excess is the first amount you have to pay out of your own pocket when you make a claim. Some insurance companies may charge a higher monthly premium, but then your excess is lower, or vice versa – so don’t be seduced by low monthly premiums until you find out what you’ll be in for when you make a claim.

When it comes to buying insurance be guided by the principle that your insurance cover should always put you back in the same position you were before the loss.