THE subject of home insurance cannot be complete without discussing the cover applicable to house contents.
Having established in our previous articles of the affordability of house owners insurance the paradigm now shifts to insurance for contents so as to complete the equation.
We will use the word householders to refer to the insurance policy for contents which are the subject matter.
First of all we need to understand what constitutes contents.
If you are a tenant and decide to shift to another house or location, all the goods which are yours that you will move with, are qualified as contents in our context.
Some examples of the contents include television sets, music players, video players, sofas, fridges, deep freezers, stoves, beds, mattresses, bedding, picture frames, curtains, clothes, antiques, jewellery, other valuables, etc.
When applying for cover, insurers will normally request for a list of all the contents with serial numbers where applicable and the replacement values.
One might ask on how they can provide a list for clothes given that some people actually do not know how many clothes they have exactly especially women (a tickle on women…). Speaking as an empiricist my wife has ‘countless’ pairs of shoes for example compared to my few ones….
The most ideal approach is just to estimate the total amount of clothes or those valuable ones such as suits can be itemized, however a block figure should be able to suffice for the purposes of taking up this insurance.
The next question is to understand exactly what is covered.
The perils that are covered under householders are firstly all the basic fire perils covered under house owners.
These include fire, lightning explosion, and thunderbolt, etcetera (you may wish to refer to last week’s column for a detailed understanding of perils covered under house owners insurance).
The rationale here is that when there is damage to the house which subsequently causes damage to the contents then the contents should be covered as well.
For example if fire damages the house together with the contents (as in the real life situation I quoted last week) then the house and contents should be covered provided both house owners and householders policies was in place.
If one is renting a house, then the house owners taken by the landlord will pay for the damage to the house while the householders insurance will pay for the contents which belong to the tenant.
In addition to the basics fire perils householders goes on to cover theft or attempted theft.
Theft in insurance has a special meaning.
The definition of theft under the Theft Act of 1968 is ‘A person is guilty of theft if he dishonestly appropriates property belonging to another with intention to permanently deprive the other of it’.
However in insurance there was a modification or qualification to this definition.
For theft to qualify for insurance purposes there must be physical and forcible entry or exit to the premises or a break in.
The intention of this qualification is to prevent people from just taking the goods out of the house for example and then claim that they were stolen.
With forcible entry or exit qualification this loop hole is mitigated as it is difficult for someone to damage their own house in order to claim from insurance, unless out of malice which if the insurers discover the consequences are equal to that of a criminal.
What about damage by power surge damage?
Well this is the most common peril likely to cause damage to most electrical appliances.
Ideally insurers will insert a condition that all such appliances must be connected to power surge protector (s).
However we know that even with power surge protector, electricity has the potential to damage the appliances as experienced through many incidents of this nature, I inclusive.
I recall when one of my appliances was damaged due to a power surge. I visited ZESCO Centre who categorically told me that though they were liable to pay for damages of such nature it was unpractical to implement because that would open a pandora’s box which will make it very expensive for the utility company to ‘afford’.
People will have to fall on their appropriate insurance if any.\
To be continued….
Comments: webster@picz.co.zm or webster_tj@hotmail.com or on face book search for Insurance Talk-Zambia page or call/text 0977 857 055 [The Author is a Chartered Insurer with more than ten years industry experience]