Do you need an alarm to buy home insurance?
Installing a burglar alarm can have many benefits. But how much impact does it have on your home insurance?
Many insurance buyers believe that installing a security system does not only reduce the chance of theft, but that it is also a prerequisite when buying building or home insurance. But is it really?
A burglar alarm is definitely a good investment, but it plays a very minimal part in the cost of your insurance. According to Hannya Kejaa, financial adviser from InsuranceBusters, factors that do determine the cost of your insurance include your neighbourhood, the value of your home contents, claims history, and yes, the security system.
Waynard van Vuuren, a partner client at King Price, says insurers normally look at theft trends in your neighbourhood. These are often linked to a suburb’s proximity to open land, greenbelts, building and development activity, highways, informal settlements, industrial areas, and so forth. He says an insurer will also consider the theft history at the specific address being insured.
Value of your home contents
When you purchase your home contents insurance, you will need to calculate the value of your home contents and submit it to your insurer. This value will determine the cost of your insurance. It is important that you do not underestimate nor overestimate this value. Underestimating it would mean that you will not get enough pay-out to replace your items. While overestimating it would mean that you unnecessarily pay high premiums.
The more you claim from your insurance, the higher your premiums will be. So, before you start calling your insurer, assess the claim and see if you can’t cover the damages yourself and save your claim for more serious damage.
Of course, you cannot overlook the fact that having a security system will keep your claims history healthy, and your premium low. According to Van Vuuren, the different risk factors inform insurers’ requirements for an alarm.
He says that if an alarm is a condition of your insurance, it must be linked to a 24-hour response company. He adds that it is the consumer’s responsibility to ensure the alarm is always in proper working condition, and it must be activated when there’s no one on the premises. If not, an insurer will have a good reason to decline the claim for theft.
Even though having an alarm may be of little assistance when buying your buildings or home contents insurance, having an alarm linked to a reputable response company makes your home safer for you and your family.
This article has been prepared for information purposes only and it does not constitute legal, financial, or medical advice. The publication, journalist, and companies or individuals providing commentary cannot be held liable in any way. Readers are advised to seek legal, financial, or medical advice where appropriate.