We look at the three different types of insurance essential to homeowners – and why Building Insurance is the most important of all.
Published: Tuesday, April 17th 2018
Call it BuildingInsurance, HomeInsurance or HomeownersInsurance; they’re pretty much one and the same thing. Understanding the ins and outs of this type 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 HomeInsurance to help you along. Then, we’ll offer some tips to assist you in making the right choice.
Homeowners get three types of insurance to choose from. These are HomeownersBuildingInsurance, HomeContentsInsurance and lastly, PersonalValuablesInsurance.
BuildingInsurance is the big one here. 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 also offer PersonalLiabilityCover. 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 totally never happened to me.
Home Contents Insurance
Nice Coricraft lounge suite you’ve got there. Would be a real shame if something were to… happen… to it.HomeownersBuildingInsurance protects the physical structure of your house, but it doesn’t cover what you’ve got inside. For that, you need HomeContentsInsurance.
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 are excluded from this type of cover.
Personal Valuables Insurance
This type of policy is independent from the aforementioned types of insurance. PersonalValuables covers anything you would usually carry around outside of your home. This includes handbags, laptops, jewellery, bicycles, etc.There are two types of 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 specified in your policy schedule.
How To Choose Your Building Insurance
Burst geyser, collapsing wall, storm took your roof off, etc. Whether compulsory or not, Building Insurance is important. Some of the damage or losses we suffer are simply unaffordable to rectify.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. Always 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.