By Garry Hertzberg, practising attorney at Dewey Hertzberg Levy and Host of the Laws of Life with Garry Hertzberg on Cliffcentral.com
The holiday season is looming and that means more shopping, more gifts, and also sadly more crime including housebreaking and robbery. For whatever reason, be it that there are more unoccupied homes that the criminals are collecting Christmas presents from, or just that people are less vigilant over this period, there is an increase in household burglary.
Last year, a friend of mine was burgled and all of her electronic goods were stolen. Thankfully she had insurance, or so she thought.
After putting in her claim, she was only paid out for around half of the value and she just about hit the roof, she had no idea why she didn’t get enough to replace the stolen items.
The truth is that, just like most of us, she had never read her insurance policy which included a little clause called ‘average’. The average clause is a common clause appearing in almost all household contents policies. It means that if you are insured for less than the real replacement value of your property, any claim will be adjusted accordingly.
For example, if you have purchased cover for a R100 000, and actually have household contents to the current replacement value of R200 000, the insurer will adjust the claim by R100 000 over R200 000, or by half and the insurer will only pay you 50 percent of your claim.
In this case, her insurers claimed that she had underinsured her household contents, which means that her actual household contents’ replacement value was much more than the value she had insured for.
It is important to insure the full replacement value of your property so that in the event of a claim, you’re fully covered, or at the very least be aware of the ‘average’ clause.
Incidentally, the onus is on you to show that the items you claim were stolen were in fact in the house. For any items for which receipts may be lost, take pictures or a video of your household contents and store it. You never know when you may need to prove it to your insurer.
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