Black Friday Deals – Now What?

As the excitement from Black Friday begins to dissipate, and the spoils of the amazing deals have now taken a place of pride in homes across South Africa, it is time to consider any implications your purchases may have on your short-term insurance policy.

While this is a topic that many find unpleasant, the importance that short-term insurance plays in protecting your hard-earned spoils and ensuring that your items are correctly insured, cannot be understated. The Office of the FAIS Ombud urges all South Africans to better understand the benefits provided by their household contents insurance policy. This is crucial for effectively safeguarding your purchases and avoiding potential claim rejections, whether due to incorrect advice or a lack of understanding about your coverage.

The Office of the FAIS Ombud would like to highlight the following:

  • Underinsurance and the Principle of Average
  • All Risk Cover
  • Protection against Loadshedding
  • Accidental cover.

Underinsurance and the Principle of Average To avoid being underinsured, one must make sure that possessions are adequately insured. What this means is that the value of your belongings in your household contents cover must have accurate replacement values. Underinsurance arises when the amount for which your household contents are insured is less than the replacement value. When this happens, it gives rise to the principle of average, which allows an insurer to reduce its liability proportionally to the percentage by which an object is underinsured. This may be easier to understand by way of an example:

Mr. A insured his household contents for R2 000 000, but the actual replacement value was R3 000 000. If Mr. A’s home is damaged in a fire and all his goods are destroyed, the insurance company will send an adjuster to assess the damage and determine the amount of his claim. If the adjuster determines that the cost to replace his household contents is R3 000 000, the average principle will be applied. This means that Mr. A will only receive a percentage of his claim based on the ratio of his coverage to the actual value of his household contents. In his case, he will only receive 2/3 (or 66.67%) of his claim, which is R1 340 000

Whilst it is a Financial Services Provider's responsibility to advise you as to the risks of underinsurance and that your items should be valued for replacement value and the dangers of the application of average, it remains your responsibility to provide your adviser and insurer with correct information – including the true cost of the items you’re insuring, should they need to be fixed or replaced.

So, remaining with the theme of Black Friday, it may be worthwhile for you to consider that your new double-door fridge, washing machine, curved HD television, etc. would cost more to replace than your previous items. Consider whether your household contents value in your policy is still sufficient or should be revised.

All Risk Cover

This is a vital aspect of short-term insurance that needs to be considered where for example Black Friday saw you purchase items such as jewellery, laptops, mobile phones, bicycles, camping equipment or any valuable item that one would use primarily out of the house.

These valuable items will at some point be removed from the insured premises, and should they be damaged or stolen, they will not be covered under your household contents cover. All Risk Cover can include both Unspecific and Specified All Risk Cover. With Unspecified All Risk Cover you receive broad cover for all the personal possessions you take out of your home daily. For example the contents of a handbag, or unspecified jewellery. This cover is normally included in one’s policy and whilst you may have cover for a certain amount, for example, R5000, it can be limited to R1000 per item. Specified All Risk cover enables you to specify the item as well as its value, for example, if you specify your wedding ring. As a rule of thumb, the more expensive the item, such as laptops, jewellery, and mobile phones, the more important it becomes that it be specified. NB: Whilst you may have been able to purchase the specific item at a reduced price due to Black Friday sales, the item must be insured for its replacement value or in the case of jewellery, its appraised value, to ensure that you are able to replace the item when something goes wrong.

Consult your advisor about the items specified in your insurance policy, and don’t be afraid to ask questions about the items you are unsure of.

Protection against Load shedding

Black Friday purchases would have seen significant savings on electronic devices such as televisions, fridges, freezers, microwaves, and other household appliances.

One of the most common effects of load shedding on household appliances is power surges. These sudden spikes in voltage can damage or destroy appliances. Load shedding and /or blackouts are not in themselves an insurable risk under an insurance contract. However, damage to household contents caused by power surges is an insurable risk. Some insurers include this cover automatically under household contents cover, and others offer it as an optional add-on. Some insurers may require the installation of surge protectors to qualify for cover. Consumers are urged to confirm their specific cover with their insurers.

Your adviser has a duty to make you aware of this when you apply for your policy. However, you should consult your advisor when you acquire new electronic items. Ask about the protection your policy offers regarding power surges and whether there are any requirements you need to adhere to.

Accidental cover

An aspect of short-term insurance that is often neglected is losses due to accidental damage. This is because most people assume that any loss or damage caused to items covered in terms of the household contents cover will be covered. While this may be true for insured events such as fire, lightning, explosion, malicious damage, storms, bursting, overflowing of geysers, break-ins, and theft, accidental damage itself is not automatically included in one's policy.

Cover in respect of accidental damage can be added to one’s existing policy at an additional premium and may be a worthwhile consideration should you have children or pets for example.

Once again it is important for you to know what your specific policy provides and that you consult your advisor on a regular basis to ensure that you are appropriately insured.

If you believe you have experienced financial prejudice due to a financial service related to home content insurance or any other financial product, visit our Complaints Portal at and choose 'Lodge Complaint.' Alternatively, submit a written complaint to This email address is being protected from spambots. You need JavaScript enabled to view it.. For assistance in submitting a complaint, you can also call our Client Care Centre at (012) 762 5000 or Sharecall 086 066