Understanding the ins and outs of insurance is absolutely critical if you’re interested in safeguarding your home from unforeseen loss or damage. 

In this building that we call home, we store everything we own. We can protect it from burglars with burglar bars and electric fences and armed response and spotlights and razor wire and security cameras – this is beginning to sound like a home in Johannesburg suburbia – and guard dogs and a moat and a fancy alarm system… 

But how do we protect our homes from natural disasters and anything else that’s outside of our control? 

First, we’ll have a look at the different types of insurance available to help you along. Then, we’ll offer some tips to assist you in making the right choice. 

Homeowners get three main types of insurance to choose from. These are Building Insurance, Household Contents Insurance and lastly, Personal Valuables Insurance.

The first of these may go by many names. Call it Building Insurance, Home Insurance or Homeowners Insurance; they’re pretty much one and the same thing, and possibly the most important type of insurance on this list. As the saying goes; home is where the heart is, and covering your greatest asset is important.

Few people could afford to pay a massive lump sum on home repairs in the event of catastrophic damage, which could be caused by anything from fire, flooding, lightning, heavy winds or an earthquake.

Building Insurance ensures that the physical structure of your home or business is covered against these types of risk. 

From flooding due to a huge storm, a burst water pipe or even a geyser, water damage is one of the most frequent occurrences that impacts a home. Fire is right behind it, from a raging wildfires to an electrical fault in your home. Lightning is one of the top reasons for claim submission in South Africa, as it could have a huge impact on the electrical integrity in the home. 

It isn’t compulsory to own such a policy in South Africa, except for when homeowners find themselves in need of a home loan. In such a case, most banks consider it an obligatory requirement.

• The policy covers the building structure of your home against accidental loss or damage;
• This includes loss or damage from fire, theft, flooding, lightning or a drunkard ploughing their car through your wall;
• This kind of cover may also extend to other structures on the property such as swimming pools, outhouses, car garages, etc. This depends on the insurance company you’re with;
• It also applies to permanent fixtures in your house, such as fitted kitchens, bathtubs, toilets, etc;
• In addition, some insurers will be willing to offer Personal Liability Cover and Building Insurance as a package deal. This is to protect you from any third party claims when somebody else suffers accidental injury, death or illness on your property. This includes any loss or damage to the property of any third parties, such as when you chop a bunch of cacti down in your yard, and a few months later they grow back skew, and collapse onto somebody’s car in your driveway. Which, you know, may or may not have happened to the author of this article.

Building Insurance protects the physical structure of your house, but it doesn’t cover what you’ve got inside. For that, you need Household Contents Insurance.

It's easy to underestimate the value of your household and its contents. When considering what we stand to lose in the event of burglary, robbery, fire or flooding, and how much it would cost to replace all of it, we begin to appreciate the importance of having these items adequately insured.

Many people simply have no idea what they can and cannot insure with household insurance, but the truth is that you could insure almost anything, and there are a variety of customizable packages available from several insurers.

According to the recent 2018/2019 Crime Stats, 22 431 cases of residential robbery were reported last year, as well as a staggering 220 865 cases of burglary. Yet, one in three South African households remain underinsured, or not insured at all. 

These scenarios are exactly what Household Contents Insurance has been designed for: the unexpected loss or damage of the items in your home. 

Household Contents Insurance:

• Is designed to cover your household items against loss or damage caused by accidents such as a burst geyser or water main, theft, burglary, malicious damage, electrical fires or natural disasters such as storms or flooding;
• These items could include your furniture, appliances, clothing, etc. Fixed items, as listed under Building Insurance, are excluded from this type of cover.

Also called All-Risk Insurance, this type of cover is independent from the aforementioned types of insurance. 

Think about all the items that you leave your home with; your mobile phone, tablet, handbag, laptop, bicycle, jewellery, that expensive leather jacket, camera, watches, glasses, sunglasses. Consider what you might be carrying on your person all day, how much it's worth, and work out just how expensive it would be to replace all of it, should something happen.

Personal Valuables Insurance, then, covers anything you would normally carry around outside of your home. 

There are two types of All-Risk cover – Specified and Non-Specified Items. 

Non-Specified covers a standard list of items and pays up to a certain amount in the event of damage or loss. 

Specified is for individual cover on the most expensive items, such as smartphones or laptops. Specified will compensate up to the amount stated in your policy schedule.

All three of the above-mentioned types of insurance can get a little bit complicated, and it's important to chat to your broker before deciding which to get. 

Building Insurance, in particular, can be challenging. 

Here are a few useful tips which will help you make the right choice in insurer, and help you get the best out of your policy.

1. Choose Wisely

Most insurance companies offer great Building Insurance options. You need to assess your needs and choose the policy which suits it best. It's always wise to opt for comprehensive cover, which covers the widest range of events.

2. Be Honest

Always remain honest about the value of your property when completing insurance applications. Otherwise, when the time comes to claim, you might find yourself underinsured and will need to fork out a lot of additional money for repairs.

3. Keep Up With The Maintenance

It’s important to maintain your property properly. Fix the leaking roof, replace faulty plumbing, etc. If you’ve recently done this, your monthly premium will probably be lower. If, however, you’ve left your house to fall into disrepair and it’s permanently on the verge of falling down, the insurance company might not cover you when it’s time to claim.

4. Know Your Policy

Make sure you know exactly what your policy includes and excludes. If you live in the Highveld, for example, and the area is prone to lightning storms or flooding or burglary, you need to know that you’re covered for that before signing on the dotted line.

5. Plan For Construction

If you have intentions of renovating or building anything new on your property, a little bit of foresight goes a long way. Avoid flammable building materials such as wood, and opt for weather-hardy materials such as concrete or brick instead.

6. Keep The Insurer In The Loop

This goes for all types of insurance. If you make any changes or renovations to your property, inform your insurer immediately to ensure that you’re covered.

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