Insurance for homeowners

It's hard to get excited about insurance... also known as the grudge purchase of all grudge purchases! But best to take a leaf from 2020's book and make sure you have the necessary risk cover in place, particularly when it comes to your home.

Homeowners insurance is important for all property owners. "Grudge purchase or not, homeowners insurance is the best way to protect what is likely to be your biggest asset - your home," says Kim Hogben, principal at Leapfrog Durban North. 

Simply put, home insurance is financial protection 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. 

"But, as always, make sure you are familiar with the fine print as all policies differ and the cover mentioned above might not be included in yours," Hogben cautions. 

Here's what you need to know about the different types of insurance. 

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.

You may want to extend the cover to protect any other structures you have on your property, like a garage, garden shed or swimming pool. "Depending on your needs and circumstances, it may even be useful to add coverage for permanent fixtures in places like the kitchen and bathroom," Hogben suggests. 

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," Hogben explains. 

Personal liability cover could also be specified to cover accidental loss or damage caused to a third party's property. 

Contents insurance 

Contents insurance is essentially to protect household items like appliances, furniture and clothing about loss or accidental damage. Hogben says: "Typically theft, burglary, fire and natural disasters like storm and flood damage are some of the circumstances under which homeowners can claim for contents insurance." 

But note that immovable objects like taps and carpets, are usually not covered by contents insurance. 

Hogben suggests familiarising yourself with the exclusions, as much as the inclusions in the policy to avoid surprises at inopportune times. 

Do I have to?

The answer to this question is the typical refrain of any grudge purchase. It's not compulsory but actually you really need it. "There is no legal obligation to have homeowners insurance but if your property is bonded the lender usually requires that you take out a comprehensive insurance policy that covers the value of the property," Hogben explains.

This policy is to cover structural damage to the property caused by things like fire and storm damage, which affects the value of the property and thus impacts the loan amount. 

"While it is obligatory to have this if you have a home loan, you don't need to settle for the cover offered by the bank and you're free to shop around for the best policy for your needs. You just need to prove that you have comprehensive cover on the property," Hogben advises. 

The right cover for you

There are many different insurance products on the market, covering vastly different things, and many of them can be tailored to your exact needs.

Take the time to find the right one, and pay attention to the fine print, and especially to the exclusions. A trusted property advisor will also be able to help and guide you in this regard.