House Insurance
There are three options on how to insure your home. These are:
Option 1
Is to insure your home based on its square meterage, known as the No Sum Insured Basis. This takes away the fear of not having enough cover and this way underwriters guarantee to rebuild your home to the square meterage noted on the proposal. You have to be reasonably accurate with regards to the meterage. If, for example, your home was 200sqm and you insured for 175sqm you will only have the home rebuilt to that sqm in the even of a major loss. There are restrictions however. Your home must have been built after 1945. Some insurers will insure homes built prior to that date but these home must be fully rewired and have a letter of confirmation to that effect.
Option 2
You can insure your home for its Replacement Value. Replacement value is what it would cost to rebuild your home in the event of a major loss. To get value from this sort of insurance you need to keep your sum insured up to date every renewal period and once again there are some age restrictions on this method as well.
Option 3
Is to insure your home for actual value known as Indemnity Value. This can be arrived at by finding out what you would sell your home for less the value of the land. For example if your property would sell of $150,000 and the land is worth $60,000 then the actual value of your home would be about $90,000. This type of cover is for older homes that have not been rewired etc.
Additional CommentHoliday Homes & Rental Homes are normally insured for Replacement value. Rental homes will incur an extra excess of $250 and exclude malicious damage by tenants. (This cover can be given but the premium is very expensive.)