This was according to MUA Insurance Acceptances chief executive, Dawie Loots, who said it was the responsibility of the property owner to ensure the insured value of their property was accurately reflected on their insurance policy.
"When it comes to insurance it is vital that homeowners ensure that their property is properly evaluated because the home must be insured for the replacement value and not necessarily for market value."
He explained the market value of a home was the price the home could be sold for.
"The replacement value is the determined amount it will cost to restore the house back to its original condition should total destruction occur."
The replacement value of a house could possibly be much higher than the market value, especially if the house had specific features or exclusive finishes.
"It is also advisable that homeowners conduct proper property valuations at least once a year when the policy is up for renewal to ensure that the insured value of the property is still relevant.
"Homeowners should consult with their insurance broker or company to ensure that they are sufficiently insured for the correct replacement value in order to avoid under insurance."
Deputy mayor Ian Neilson explained the city's general valuation was based on the market value of a property, adding the processes followed by the city complied with the Municipal Property Rates Act.
"The city valuer makes use of a computer modelling programme called Computer-Assisted Mass Appraisal which uses sales data, aerial imagery and other property information to determine the market value of a property.
"The city maintains a detailed database of all the properties in the city. The results are then reviewed by property valuers and adjusted when necessary.
"All property owners are given the opportunity to check the city's data on their property and place an objection to their property valuation, if they think that it has not been valued correctly. If the owner is still dissatisfied, he or she has the opportunity to appeal the value to the provincially appointed Valuation Board, which is comprised of property valuation professionals."
The city has evaluated 845 764 complaints, of which 719 691 are residential, and said there have been no specific complaints against the system, Neilson said.
"The city's latest general valuation shows that the total valuation of all rateable properties in the metro has increased from R911 billion in 2012 to R115.6 billion in 2015, which is an important reason for the decrease in the rate-in-the-rand or the rates portion of a municipal bill by about 7 percent.
"Some residents now pay lower rates while others pay more, depending on how the property market has fared in their part of the city."
Neilson added the property rates contributed to various services that were beneficial to residents, including disaster management, fire, road, traffic and street light services.