Insurance and property ownership: Here's what to know

It's probably not unfair to call insurance the grudge purchase of all gudge purchases! The original grudge purchase, if you will. 

And while we all live in the hope that we'll never need to use that insurance policy (or dip into the rainy day fund), the reality is that life happens - as do pandemics, floods and high interest rates. 

The bottom line, thus, is that it pays to have the necessary protection and risk cover in place, particularly when it comes to your home. 

Insurance is important for all property owners as it is the best way to protect what is likely to be your biggest asset - your home. This is the view of Johan van Schalkwyk, Principal at Leapfrog Roodepoort. 

"Nobody likes spending money on something that they may only need in  five years time - or never, if you're lucky - but when you do need it, there are few things as reassuring as knowing you're properly insured," Van Schalkwyk believes.

First things first

Home insurance is the financial protection you have in place in the case of loss or damages related to the property. There are also a number of possible advantages to insurance, including emergency repair services and cover for temporary living expenses in the event of property needing to be evacuated. 

It goes without saying but make sure you are familiar with the fine print on any insurance policy you take out. "The terms, conditions and fine print matter when it could mean the difference between having your roof repaired or not. Make sure you're familiar with what's covered under your specific policy and reach out to a representative from the insurance company to assist if necessary. You could also contact a property professional for advice and guidance in this regard," Van Schalkwyk says. 

Building insurance 

Building insurance protects the structure of the property, typically in the event of accidental loss or damage to the structure caused by theft, fire, earthquakes and the like. 

Consider extending this cover to protect any other structures on your property, like a garden shed or swimming pool. Property owners could also look at insurance cover for permanent fixtures like the kitchen and bathroom. 

Personal liability cover is also an option if property owners want to protect themselves against third party claims. This will cover you in the event of a claim being laid against you (as the property owner) in the event of accidental death, injury or illness occurring on the property. "This is perhaps a less common route to take but it's good for homeowners to know that this option is available," Van Schalkwyk says. 

Contents insurance 

The contents of the property - items like furniture, clothing, appliances and the like - are generally seen to be more easily replaceable, compared to a roof or an exterior wall, so insurance in this regard tends to be highly personal. 

Claims for contents insurance typically relate to theft, burglary, fire and storm and flood damage but generally don't include immovable items like carpets and taps. "You want to make sure you're as familiar with the exclusions in the policy as the inclusions," Van Schalkwyk advises/ 

To insure or not to insure

It's known as a grudge purchase and not a compulsory purchase, and so while there is no legal obligation to have insurance it is accepted to be the savvy thing to do. 

"Having said that, if the property is bonded the lender (bank) may require that you take out a comprehensive insurance policy that covers the value of the property," Van Schalkwyk shares. 

Bond insurance ensures that your bond repayments can still be met in the event of death, dreaded disease, permanent disability, a job loss, disability or similar, for a period of time. Like all insurance policies, consider shopping around for the one that best suits your needs. 

It's in your own best interest

It helps to view insurance differently: Rather than see it as a grudge purchase, consider it a means of protecting and securing things that matter to you, and that represent a significant investment. 

"There are so many insurance products on the market so shop around for one that best meets your needs. And make sure to read the fine print," Van Schalkwyk concludes.