When it comes to protecting your most significant investment – your home – it’s essential to have the right types of insurance in place. Let’s face it, the country’s infrastructure has its challenges, and then there are also the increasingly bizarre weather conditions to consider. Ensuring that your home and the contents in it are properly protected against all kinds of risks has become non-negotiable.
READ: Household safety: Keeping your home warm and your insurance on track
King Price Insurance, provides better context on the types of insurance, you need to have to ensure that you have sufficient cover to protect your property from life’s curveballs. These types of cover range from buildings’ insurance, home contents’ insurance, and even property maintenance.
It all starts with buildings insurance. This insurance covers the physical structures on your property and the permanent fixtures attached to them, and it protects you against loss and accidental damage to the structure, water pipes, and gas and electricity installations. Leaky geyser? Well, buildings insurance takes care of it when you have a valid claim.
Of course, if you have a bond, then you have no choice but to have buildings insurance. But, you don’t have to accept the insurance quote that the bonding bank gives you. You can shop around to find the perfect cover that suits your specific needs. Also remember to make sure your insurance (and this applies to all types of insurance) covers the full replacement value and not just the market value.
It’s important to understand replacement value. One of the biggest mistakes that homeowners make is under-insuring their property. The insured value should cover what it would cost to rebuild your home from the ground up, including the cost of demolition, waste removal, and any professional or municipal fees involved in the building process.
It’s important to use the current building cost per square metre to determine the correct rebuild value. In 2023, the average cost to build was R10,000 to R20,000 per square metre. However, it can vary significantly depending on your province and the city or town where you live, as well as your permanent fixtures and finishings. Be sure to work out the building costs annually at the current prices.
Remember to take care of your belongings. Home contents insurance and portable possessions insurance are essential. If you could turn your house upside down and shake it, everything that falls out is covered under home contents insurance. For your appliances, consider adding cover for power surges. Items such as your cellphone and any valuables that you travel with fall under portable possessions insurance. With South Africa’s high crime rate, insuring these valuables properly is a must to ensure they are replaced without a hassle.
Keep your workers protected. One more thing to note: Did you know that you can be held liable for injuries to domestic workers that happen on your property? Buildings and home contents insurance can help reduce and manage the risk of an accident on your property.
The importance of quality construction can’t be overstated. Using NHBRC-accredited builders and engineers ensures that your home is built to withstand the challenges of time and the environment. You can even contact a professional building inspector before you put in an offer to purchase an existing property. Poor construction or shoddy renovations can lead to serious issues down the line. For instance, you might not have cover, leaving you exposed to significant financial risk.
Maintain your property. Depending on the insurance you have, unforeseen events could be covered, but it’s unlikely that damage caused by wear and tear or a lack of maintenance would be covered. This means that keeping your home in tip-top condition is important, especially if you live in a climate where minor issues can turn into major problems. Think of the impact of salty coastal air on wooden floors, as an example. These floors absorb more moisture, which can result in warping, swelling, or buckling over time. Salt particles from the air can also settle on wooden surfaces, resulting in discolouration or abrasion. Regular inspections and timely repairs will help you keep your property well-maintained to prevent costly claims.
In today’s uncertain times, having the right insurance in place is more important than ever. Buildings, home contents, and portable possessions – each play a critical role in protecting your home and your financial well-being. Make sure you’re covered for all three, and that your policies reflect the true value of what you own.
READ: How to get a better deal on your home insurance
For a first-time homeowner, figuring out what kind of insurance you need can be a bit overwhelming, to lighten the load, Karen Rimmer, Head of Distribution at PSG Insure shared her four top tips in an article published in 2019, to help you on your journey:
Disclose all the relevant details to your insurer
Did you know that the type of property you buy will impact your need for insurance cover?
There are three main types of residential property in South Africa: freehold, sectional title and property within an estate. Insurance policies for these property types will include specific clauses that pertain to the nature of the property.
“For example, with freehold or freestanding properties, mortgage providers usually require home buyers to take out insurance that covers the physical structure of the house,” explains Rimmer, “but in the case of sectional titles or apartments within housing complexes, body corporates are legally required to insure the physical structure of your home and to include the monthly premium as part of payable levies.
However, what you need to bear in mind, if you have purchased an apartment with the intention of doing renovations that change the structure of the unit, you will need to get approval from the body corporate so that they can be in a position to advise the insurer accordingly.”
Similarly, if you do renovations to your freestanding home or add to it, your insurer should be informed, and your cover adjusted accordingly.
READ: Bond insurance: The one insurance policy you should never cancel
In a article published on 3 Sep 2020, Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, explains the importance of knowing exactly what your insurance covers.
If you’ve done some renovations or improvements, here’s what you should check when it comes to your home insurance policy. To start with, it’s important that homeowners understand the two different types of home insurance:
Buildings insurance.
As the name suggests, this covers the structure of your home and its outbuildings, and their permanent fittings, against fire, damage and theft. If you own a house, make 100% sure you have buildings insurance. Regardless of whether you have a bond or not.
Home contents insurance.
This covers your stuff. If you could turn your house upside down and shake it, what falls out is home contents – clothes, furniture, TV, wine glasses, the lot. A lot of people don’t have home contents insurance.
Do a post-reno buildings insurance review
If you’ve got a bond, it’s compulsory to have buildings insurance. This is usually taken care of by your bank, and the premium is ‘hidden’ in your monthly bond repayment. But you’re not obliged to accept your bank’s quote, and it’s possible you’ll get a cheaper premium from the insurer that covers the rest of your valuables. So do shop around!
Insure for replacement value, not market value
A building’s insured value isn’t its market value. Buildings insurance should cover what it would cost to rebuild your property from the foundations up, including your boundary walls, solar panels, swimming pool, taps and tiles. It should even include what you would need to pay in a worst case scenario, like demolition charges and waste removal, and the professional and municipal fees that are part of the building process.
Review your home contents coverage
If you’ve built onto your home, and filled the new extension with brand-new furniture and appliances, this is a great time to update your home contents insurance as well. As with buildings insurance, the key is to make sure you cover your home contents for their current replacement value – don’t guess. And remember, insurers can only protect what they know about. It helps to keep the original receipts for items like big screen TVs, so that you can prove their value if you need to claim. To help you assess your home contents correctly, here’s a handy home contents inventory.
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