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What is Home Insurance (South Africa)?

Insurance is designed to minimise losses due to risk, and home insurance is no different. Home Insurance is offered by an insurance provider to an individual or company. The insured person or business pays a monthly premium amount and in return receives a policy that lays out how the insurer will compensate the insured for risks relating to their home.

The financial cover you receive from insurers will differ. Each insurer has their own set of standards and obligations. This means that before you buy Home Insurance, it is wise to consider elements in the offer and to look at what other insurers are offering.

In South Africa, Home Insurance takes two major forms, namely building insurance and home contents insurance. Some home insurance plans are comprehensive and offer you both. Others are very limited but may be more affordable. What you need will dictate which option is best for you.

What is Building Insurance?

Building Insurance offers you protection for financial risks involving the physical structure and external features of your home. These risks are often environmental in nature, but not always. Building Insurance in South Africa usually includes cover for:

  • Environmental Disasters like lightning, earthquakes, fires, floods, storms, and storm winds.
  • Damages like flooding geysers, equipment and pipes that have failed or broken, and even explosions.
  • Damage caused maliciously or intentionally
  • Theft and break-ins if damage has been caused to the actual structure of the home during a break-in.
  • Damage caused by external elements like cars, trucks, animals, and even falling trees.
  • Loss of rent if a tenant must vacate your building because of damage that is covered by the policy.

What is Home Contents Insurance?

Home Contents insurance covers movable objects inside your home that can be moved if you vacate/ to other premises. The protection offered is against different risks that are more applicable to the stuff inside your house rather than the building itself. The kinds of things home contents insurance might cover include:

  • Stolen furniture or garden furniture
  • Stolen clothing or washing
  • Damage to your personal possessions (those included in your cover)
  • Loss of your personal possessions (those included in your cover)
  • Loss of or damage to your personal possessions (those included in your cover) due to fire, lightning, storms, power surges, malicious or intentional damage, flooded geysers, broken equipment or pipes
  • Damage to or loss of personal possessions due to theft and break-ins
  • Food that has deteriorated because of power failure
  • Your or your spouse’s death due to a break-in or fire at your home
  • Your domestic employee or guest’s possessions if there is proof of the damage caused by a break-in
Is Home Insurance Really Necessary?

You are not obliged by law to have home insurance, but it is a wise safeguard against risks that are difficult to avoid. Unpredictable elements that could cause our home and home contents harm like the weather must be prepared for to avoid massive financial losses. Sometimes, if you finance your home with a mortgage, the lender requires that you take out Home Insurance.

7 Things to Consider When Buying Home Insurance in South Africa

What Exclusions Are There in the Insurance Policy I’m Considering?

Policies differ depending on the provider and the options included in your cover. Many Insurance Providers in South Africa allow you to choose which elements of cover to include in your insurance package. The most popular or common cover options you may find are:

  • Cover for fire
  • Cover for explosions
  • Cover for lightning
  • Cover for floods
  • Cover for sea surges
  • Cover for landslides and subsidence
  • Cover for water or snow
  • Cover for power surges
  • Cover for hail
  • Cover for storm and storm winds
  • Cover for earthquakes
  • Cover for theft and break-ins
  • Cover for malicious damage
  • Cover for accidental damage

Before you buy, get a quote for Home Insurance from top South African Insurance Providers to ensure you’re getting the best cover for your needs.

Is the Estimation of the Value of Your Home Contents Accurate?

Many homeowners forget to include some items on the list of goods covered by their home contents insurance. By not including every item, they may lose out or have insufficient cover should they lose the contents of their home.

Make sure the list of your home contents has everything on it and reflects accurate values for each item. This also means that you should update the list whenever you purchase something new with your insurance provider.

Is Your Home Insured for the Replacement Value?

The replacement value of your home differs from its market value. Your home should be insured for its replacement value. The market value includes the value of the land on which your home is built, whereas the replacement value is the value of the actual building or house.

Are You Getting the Best Premium?

You can influence how much your monthly premiums are. According to Alexander Forbes, Previous claims, the security you have in place and any voluntary excess will influence the premiums you’re quoted for. Other factors that can influence your premiums include the extent of the cover you opt for, the building’s construction, the location, and the value at risk.

 

Information and statistic in this article are correct at the time it was written. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.

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