Crime stats highlight need for adequate insurance

By Staff Writer
Latest official crime statistics published by the South African Police Service (SAPS) have revealed serious forms of crime such as murder fell last year; however both burglaries and robberies at residential premises increased, up 2.7% and 1.9% respectively. The report once again highlights the need for effective safety measures in homes and adequate household insurance should the worst happen.

The SAPS report also revealed that residential burglaries actually fell 23% in the four years preceding 2008/09. However, household robberies, a more serious form of crime, increased by 100% in the last five years.

According to Christelle Fourie, Managing Director of MUA Insurance Acceptances, the SAPS report show that security of the home is still a very real concern for many South Africans. "Given the high rate of burglaries and robberies from homes, it is essential that people continue to prioritise security measures in their homes such as alarm systems, security gates and burglar bars."

Fourie says these kinds of measures can help to deter potential criminals from targeting a property, as well assisting in reducing insurance premiums. "Insurance companies calculate the premium someone should pay based on the level of risk that a client represents, so the more one can do to minimize the likelihood of someone breaking into your home the better your risk profile will be."

She says one of the problems many people face when insuring their home contents is failing to insure for the correct value. "Many consumers tend to take out a home contents insurance policy and renew it every year, without taking the necessary steps to update their level of cover. Some people may feel this is a risk worth taking but many others simply don't realize the impact of underinsuring their contents and what this means when it comes time to make a claim.

If a home contents insurance policy has cover for R150 000 but the contents are actually worth R300 000 then the consumer will be underinsured by 50%. As the premium only covers the risk of half of your household goods, the insurance company will only pay out half of the claim, so the insured would receive R75 000 if they filed a claim for R150 000.

Fourie says the other problems people face with regards to insuring their contents is price inflation. "A piece of electrical equipment that cost R5 000 ten years ago, could now cost twice that to replace. However, people only tend to assess contents on the amount they paid when it was first purchased, putting them at risk of underinsurance."

Over-insurance is also an important point for consumers to bear in mind. "If there are items in your home you would not want to file a claim for in the event of theft, it is important to contact your broker or insurer to make sure that these items are excluded from your policy, which would also help to reduce your insurance premium."

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