You must insure your property and assets for their full Replacement Value.

Replacement Value refers to the current cost of replacing an insured item with a new item of similar kind and quality at today’s prices, without any deduction for depreciation or wear and tear.

Key Points for Accurate Valuation:

• Buildings and contents: Sums insured should reflect the full reinstatement or replacement cost, including improvements and inflation adjustments.
• Vehicles: Insured for the latest retail value, inclusive of standard factory-fitted accessories. Optional extras must be listed separately.
• Specified items: Must be insured for their current replacement value, as these are not automatically adjusted.

It is your duty to ensure values are accurate. Failure to insure at the correct replacement value may result in average being applied, reducing your claim payout proportionately.

Underinsurance occurs when the sum insured on your policy is less than the actual replacement value of the insured item or property. In such cases, the Average Clause applies, which means the insurer will only pay a proportionate amount of the claim, based on the level of underinsurance.

How it works:

• Loss: N$500,000
• Sum Insured: N$1,500,000
• Actual Replacement Value: N$2,000,000

Calculation:
Settlement = Loss × (Sum Insured ÷ Replacement Value)
= N$500,000 × (1,500,000 ÷ 2,000,000)
= N$375,000 (less any excess)

Outcome: You are underinsured by 25%, so you only receive 75% of your claim.

Impact on policyholders

• Reduced Payout: You will not receive the full amount of your loss, leaving you to cover the shortfall yourself.
• Financial Strain: In major losses (e.g., fire, theft), this can result in significant out-of-pocket expenses.
• Responsibility: It is the policyholder’s duty to ensure sums insured reflect current replacement values, including inflation and improvements.

Why it happens:

• Failure to update insured values regularly.
• Rising costs of building materials, electronics, and vehicles.
• Misunderstanding that purchase price equals replacement cost (it doesn’t—replacement cost is often higher).

You must report a claim within 30 days or as outlined in your policy wording.

Please note: You don’t need to submit the full claim immediately. However, it’s important to notify us as soon as an incident occurs so we can record it and assist you promptly.

Non-disclosure means failing to share important information with your insurer, details that could influence the decision to provide cover, set premiums, or apply specific terms and exclusions.

Misdescription occurs when items or circumstances are incorrectly described on your policy.

Providing accurate and complete information ensures:
• Your cover is valid and works as intended.
• Claims are processed quickly and fairly.
• You avoid disputes or reduced payouts due to incorrect details.

In short, transparency protects you and helps us safeguard what matters most to you.

An excess is the amount you pay towards a claim before your insurer settles the balance. It applies to each and every claim, regardless of who was at fault. This amount is shown on your policy schedule.

Why does it exist?

• To share risk between you and the insurer.
• To discourage small or frequent claims, helping keep premiums affordable.

Types of excess:

• Standard or Compulsory Excess: The basic amount payable on most claims.
• Additional Excess: Extra amounts that may apply under certain conditions.

Example:

If your car repair costs N$20,000 and your excess is N$2,500, you pay N$2,500, and the insurer pays N$17,500.