Why Homeowners Insurance in South Africa is a Must-Have

As a homeowner, your house is one of your most important assets.

Heck, for some, it’s right at the top of the list!

Homeowners insurance is therefore a very important and necessary expense that gives you security and peace of mind in the eventuality of loss or damage to your property!

It is very rare for a homeowner to own a house without insurance, but for those who do not have an insurance plan and for those who do not have a clear picture of why insurance is essential, some explanation could help.

If you are satisfied to let your financial advisor take control of your house or possession insurance, that is fine and well, but for a more hands-on tactic, here are a few important things to keep in mind:

Mandatory? Not quite!

South African law does not state that home insurance is mandatory!?

Did you know that?

However, banks are highly unlikely to approve a request for a home loan if the property you plan to buy will not be insured. Not only is getting house insurance an excellent idea but oftentimes you won’t be able to proceed with the purchasing of your dream home without it.

Criteria? Location!

Understanding what needs to be covered by your house insurance is the next step after deciding to take the plunge.

The criteria for this will depend on where you live: near bodies of water or next to rivers, insurance against flooding would be more appropriate vs. arid regions of the country, where there is a larger risk of fires. Knowing your surroundings will help you decide what is most relevant.

You often pay for insurance against specific risks individually. In this case, insuring your house against everything possible is not only expensive but unnecessary as well.

Whatever you decide to do, do not go for the most basic plan for financial reasons and overlook something you might end up needing insurance for later!

Types of insurance? Three!

Three main types of house and property insurance exist:

  • homeowners building insurance,
  • home contents insurance and,
  • personal valuables insurance.

The first two are most applicable to you if you own your house. Building insurance covers any damage to the physical structure, the brick and mortar, so to speak.

The second type, home contents insurance, is self-evident. This insures any possessions you own that are kept in your home.

Note that this doesn’t cover anything in an off-site storage unit. To insure your possessions wherever they are, personal valuables insurance is the way to go.

Insurance isn’t only for those who officially own the house they live in. Tenants also benefit from insuring their personal valuables. Even if you move residence, the belongings included in your insurance will always be covered.

Extras? Plenty!

Do you own a house exclusively for holidays or that is being leased out?

These buildings need to be insured as well!

Stipulating what exactly is insured on a lease contract is a good safety precaution; if anything does go awry, the tenant will know precisely where they stand with you and you cannot be held legally accountable for any loss of theirs. Cold as it may sound, this can save you as the landlord or landlady from a lot of trouble.

Closing thoughts

Two aspects should form part of your search for the perfect insurance policy that suits your needs exactly:

(1) Firstly, a content list needs to be created of what you wish to insure.

(2) Next, you want a policy that is affordable but covers all the necessary effects.

Many a website exist today that makes this step considerably easier and runs comparison searches for you.

Thus, go get a quote from the top three and decide from there!

Knowing that you are covered means you can rest easy and focus on the important thing: enjoying your home!

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