Don’t have your Nedbank ID yet?
Nedbank ID single sign-on gives you full digital access to Nedbank’s banking and lifestyle products and services on the Money app or Online Banking.
Log in
Log in to Online Banking or another one of our secured services.
Bank your way with low fees and extra benefits.
Enjoy 55 days’ interest free credit and other benefits.
Affordable loans and interest rates from R2k to R300k.
Up to 100% property loan and 105% for first-time buyers.
Debt management support when you need it the most.
Cover for you and your family in the event of death.
Car, building, house contents, valuables and more.
Bond, credit card, overdraft, loan and car repayments.
Guaranteed income and growth plans for future income.
Achieve your financial goals with expert planning.
We’ll help manage your assets, debts and estate planning.
Accounts
-
Everyday banking Simpler more affordable
-
Kids accounts For children under 16
-
Youth banking For 16 to 26 year olds
-
Seniors accounts For 55 years and older
-
Private Clients Personalised banking services
-
Private Wealth The globally integrated account
-
Digital wallet Your phone is your bank account
Credit cards
Digital banking
Switch to Nedbank
Fraud awareness
Forex
Greenbacks
Accounts
-
On demand Money available at any time
-
In 24 hours Cash in your hand the next day
-
In 32 days Funds ready within a month
-
End of term Investments left until maturity
Investment services
Share trading
Personal loans
Home loans
Overdrafts
Vehicle finance
Solar finance
Debt assistance
Funeral cover
Short term insurance
Credit Life
Travel insurance
Business cover
Secure investments
Financial planning
Estate, wills & trust services
Nedbank Private Wealth
Speak to a financial adviser
Blog
Talk to us
Find us
- Login & Register
- Online Banking
- Online Share Trading
- NetBank Business
- NedFleet
- Nedbank Greenbacks
- Nedgroup Investments
- Nedbank ID
- Bank
- Accounts
- Credit cards
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Greenbacks
- Explore Bank
- Accounts
- Everyday banking
- Kids accounts
- Youth banking
- Seniors accounts
- Private Clients
- Private Wealth
- Digital wallet
- See all accounts
- Premium banking
- Get help choosing
- Goal saving
- Family Banking
- Refugees and asylum seekers
- FAQ
- How-to guides
- Discontinued accounts
- Everyday banking
- MiGoals Premium
- MiGoals Plus
- MiGoals
- Kids accounts
- MiGoals4Kids
- Youth banking
- MiGoals Premium
- MiGoals
- MiGoals Plus
- Seniors accounts
- MiGoals Premium Senior
- MiGoals Plus
- Private Clients
- Pay-as-you-use
- Young Professionals
- Private Bundle and Private One
- Private Wealth
- Private Wealth Bundle
- Digital wallet
- MobiMoney
- American Express
- Amex Gold
- Amex Platinum
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Greenbacks
- Exclusive discounts
- FAQ
- How-to guides
- Save & Invest
- Accounts
- Investment services
- Share trading
- Explore Save & Invest
- In 24 hours
- JustInvest
- PlatinumInvest
- Tax-free Savings
- MoneyTrader
- EasyAccess Fixed Deposit
- PrimeSelect
- In 32 days
- Electronic 32Day Notice
- 32Day Notice
- End of term
- Tax-free Fixed Deposit
- Electronic Fixed Deposit
- Electronic Optimum Plus
- Platinum Fixed Deposit
- Fixed Deposit
- OptimumPlus
- Investment services
- Share trading
- Borrow
- Personal loans
- Home loans
- Student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Explore Borrow
- Personal loans
- Loan consolidation
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Explore loans
- FAQ
- How to guides
- Loan consolidation
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Home loans
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R32,000 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Explore home loans
- FAQ
- How to guides
- Track application
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R32,000 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Student loans
- Explore student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- Insure
- Life cover
- Funeral cover
- Short term insurance
- Credit Life
- Travel insurance
- Business cover
- Secure investments
- Explore Insure
- Life cover
- Get a call back
- Explore MyCover life
- Funeral cover
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Get a call back
- Explore MyCover Funeral
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Valuables insurance
- Get a call back
- Explore MyCover short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Valuables insurance
- Credit Life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Get a call back
- Explore credit life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Travel insurance
- Business cover
- Secure investments
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Get a call back
- Explore MyCover Funeral
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Plan
- Financial planning
- Estate, wills & trust services
- Nedbank Private Wealth
- Speak to a financial adviser
- Explore Plan
- Financial planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Estate, wills & trust services
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Nedbank Private Wealth
- Speak to a financial adviser
- Learn
- Blog
- Explore Learn
- Blog
- Contact us
- Talk to us
- Find us
- Explore Contact us
- Talk to us
- Find us
Avoid the risk of underinsurance
Avoid the risk of underinsurance
Staff writer
Posted 08/11/2022 Updated 10/10/2023 4 mins
Not insuring your home or contents for the right sum can be a costly mistake.
We never know what the future holds, so investing in various forms of short-term insurance is a good money choice to protect you from unexpected events. However, insurance is meant to give you peace of mind – it shouldn’t add to your worries. That’s why it’s so important to check that you always have adequate cover.
If you’re underinsured, you run the risk of not having a loss fully covered by your policy, which can have a big financial impact on you and your family. To ensure your short-term insurance is the financial stress reliever it’s meant to be, you must make sure that the amount you are covered for is enough to replace or repair any insured item.
It isn’t enough to simply ‘have insurance’ – the amount for which you’re insured must be equal to the full current value of all the items covered in the policy.
We have some tips to help you prevent any nasty surprises when you need to make a claim.
What is underinsurance?
Underinsurance means that the sum insured on your policy – that is, the maximum amount you can claim in the event of a loss – is less than the cost of replacing or repairing the items insured. You won’t receive enough from the pay-out to cover the cost in full, and you will have to pay the difference.
When you make your final bond payment, be sure to add adequate building cover to your insurance portfolio
For example, if you’ve insured your house for R1 million, but the actual replacement value is R2 million, you’ve only covered 50% of the costs in the event of a loss. Your house is underinsured, and you would be responsible for covering the other half. Note that in this example, when we’re talking about building insurance, the market value of a property may be different to its replacement value, so it’s important to get expert advice on what the actual costs of replacing it would be.
Tips to avoid being underinsured
Having the right insurance cover in place starts with you giving your insurance provider the correct information. Provide a full list of all the items that need to be insured and the actual current replacement costs.
1. Make sure the sums insured include all the costs involved
a. Homeowner’s (building) cover
The sum insured should cover the cost of all the structures on the property like boreholes, swimming pools, solar panels and any walkways, including value-added tax. Building costs are charged per square metre and do not include the cost of construction, finishing and fittings.
b. Household contents
Any of your possessions that are not physically attached to the structure of your home must be covered by your household contents insurance. In addition to large items, such as furniture and appliances, household contents also include personal items like clothing and mobile devices.
2. Update your policy whenever necessary
Make sure you inform your insurer if you make changes that may require an increase in the sum insured. In the case of your homeowner’s cover, this means any renovations or additions. For household contents, make sure you include any new items purchased, such as a new sound system.
3. Review your policy every year to keep pace with inflation
The price of household items, building materials and construction increases every year because of inflation. Review your policy at least once a year to ensure that the sum insured still covers the current replacement value, not the amount you paid when you bought it.
4. Get an expert opinion
When taking out a policy for the first time or when adding new items to your policy, opt for an evaluation by a professional. Some items, like jewellery, may require a valuation certificate. Check with your insurer if you also need this for the items you’re insuring.
5. Bonus tip
When you buy your home, mandatory building insurance may be bundled with your home loan payments every month. It’s important not to let this cover lapse once your home loan is paid off, so when you make your final bond payment, be sure to add adequate building cover to your insurance portfolio.
We can help keep you adequately covered
Use the following tools to make sure you are adequately covered:
- A building replacement value calculator.
- An inventory form to keep track of your assets (we recommend that you update this once a year).
To talk to a risk advisor or consultant for expert advice about your insurance needs, complete our online contact form and we’ll call you back.