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Much is said, done and debated about the insurance of household contents and motor vehicles in South Africa, but immovable property is … well, mercifully immovable and therefore relatively low risk. Take the list of risks covered by buildings insurance in general

* Fire, lightning and explosion;

* Malicious damage;

* TV aerials, satellite dishes and masts;

* Bursting, leaking or overflowing pipes, water apparatus or oil-fired heating apparatus;

* Storm, flood, wind, water, hail or snow;

* Earthquake;

* Loss or damage to the private residence caused by impact;

* Theft or attempted theft;

* Gradual sinking of land (subsidence) and landslip of the land supporting the private residence; and

* Damage by wild baboons or monkeys.

Such risks might be relatively small, but the potential cost of the events is large in inverse proportion to the risk. Even a geyser burst in the roof space above a main bedroom can cause extensive damage, resulting in many hours of costly mechanical drying and, potentially, the expense of replacing the ceiling, built-in cupboards and fitted carpets. A fire or flood is a catastrophe that only a good insurance policy can help you to get through – and all the better if the policy includes emergency assistance, so you are supported through the process.

When a claim is received on a property that is underinsured in the judgment of the assessor, the insurance company applies the “average” clause, which means that the homeowner is regarded as sharing the liability to the extent of the underinsurance. This principle operates throughout the short-term insurance industry as a means of protecting the insurer against underinsurance and is explained in the terms and conditions of every policy.

Replacement value might be the linchpin of buildings insurance, but don’t expect to hear it from the insurance companies’ call centres.

Another argument is that short-term insurance is just that – short term – so consumers are entitled to cancel or amend their policies at any time, move to another insurer offering a cheaper premium, or reduce their cover as they wish. That could mean a lot of wasted time for assessors.

The extent of repudiations and reduced payouts also depends on the insurance company’s approach to claims.

WHO NEEDS A BROKER?

The rise of call centres and the fierce competition that has developed among insurers to encourage consumers to call direct has created a perception that brokers are superfluous – that it is smarter and more cost-effective to cut out the middleman. In fact, it certainly does not cost more to use a broker, in terms of time or money.A broker who is independent and an authorised financial services provider in terms of the Financial Advisory and Intermediary Services Act can give you access to multiple insurers – and you only have to answer questions once.The insurance company you choose will pay the broker’s commission and the prospect of a continuing relationship between you and your broker ensures that the advice you receive will be tailored to your specific needs. And brokers are better at interpreting cryptic clauses and cross-checking the details in policy documents.