Insuring Your Home

What is Building Insurance and Why do I Need it?

You just bought a house, one of the largest assets you’ll ever own and of course you don’t want to add to your expenses. But imagine something unforeseen happens and this large asset of yours takes damage or you lose your whole entire home to some unfortunate event. There’s nothing worse than not having ‘security’ measures in place. Insurance is a safe haven against any unforeseen event.

Building insurance is mandatory when you apply for a home loan, as it covers your home against loss and damage beyond your control, such as theft, fire, floods, wind damage or other natural disasters. While you don’t have to take the building insurance that your bank offers, it is usually compulsory for you to prove that you have this type of cover in place.

Investing in building insurance will give you peace of mind and the assurance that your home will be taken care of without you having to spend hundreds of Rands you didn’t budget for.

What is My Home Worth?

Unfortunately many homeowners take building insurance for granted and fail to update the policy in order to have a home insured for replacement value at current costs.

While insuring your home for its market value may seem like the right thing to do, homeowners need to keep in mind that replacement costs will differ according to elements such as improvements, finishes, design and the location of your property.

In the unforeseen event of losing your entire home, don’t forget to take into consideration that there are also added costs involved when rebuilding a home, such as building contractors’ fees, demolition costs, the removal of all the rubble, building materials and so forth.

Keeping all of this in mind, it’s important to ensure that your property is adequately covered. This can be achieved with the help of an independent property valuation expert. These experts will inspect your property and compile a report of the features of your home, the condition it is in and any other attributes to provide you with an accurate estimated replacement cost for insurance purposes.

When Should I Review My Insurance Policy?

As a homeowner, you should put aside time at least once a year to review your insurance policy carefully. Because month after month the cost of living rises and provision needs to be made for all these increasing costs. So ask yourself – “is the replacement cost of my property still the same?” For example, consider a rise in inflation and what effect it would have on construction and other related costs. Here’s when you should also have your insurance policy reassessed:

• You’re moving to another town or province. Keep your insurance provider in the loop about your upcoming move to help protect your cover and ensure that no lapses occur in-between.

• If you’ve remodelled your kitchen or your bathroom, call a property valuation expert to come and analyse the improvements, to ensure that your property is still accurately insured.