Your home is your castle. It's a valuable asset filled with your most prized possessions. As a homeowner, it makes sense to look after and protect it should a tragedy strike. That's where home insurance comes in. This safety measure protects your home and provides financial support when an unexpected loss or damage occurs. Let's dive into the basics of home insurance.
What is home insurance?
Every day you and your home are exposed to various risks. While there are a number of safety measures you can put in place, there's no guarantee these are fool-proof. Home insurance refers to different policies you can take to protect your home's structure, contents, and even pay bond payments if you are unable to cover the costs.
Importance of home insurance
Depending on the type of home insurance, it can have a number of benefits. Firstly, it can assist you financially to cover repairs or replacement of household items that are damaged or broken. Home insurance providers will help you action emergency repair services to protect and prevent further damage to your house. Where you've had to undertake a mandatory evacuation, some insurance policies will cover your temporary living expenses provided your claim is approved.
In some cases, specific types of home insurance are compulsory. Most mortgage lenders such as banks will make homeowners insurance a requirement if you take out a home loan with them. This ensures both you and the lender are protected from any structural damage to the property.
Types of home insurance coverage
As a homeowner, there are three types of home insurance you can consider. These are homeowners insurance, home contents insurance, and personal valuables insurance. You can also take on bond protection insurance. Let's unpack each insurance type further:
1. Homeowners insurance: Also known as building insurance, this covers you for environmental and accidental damage to the physical structure of your home and external buildings. Depending on the insurance policy, the external buildings can include garages, pools, and greenhouses. It also covers fixtures such as geysers, bathtubs, and stoves.
The damage can be from natural disasters, animals, theft, burst geysers, or malfunctioning equipment. Homeowners insurance is a good choice to prevent a large unforeseen catastrophe. A note: you may not have to pay for this if you live in a sectional title as all the units within your complex may be insured under one policy.
2. Home contents insurance: While homeowners insurance covers the physical structure, home contents insurance covers all your movable personal items. This is essentially all the items you could take with you in a move. The insurance covers you for loss, damage, and theft to your household contents such as appliances, clothes, curtains, jewellery, crockery, and so on.
The events that prompt a need for home contents insurance can include natural disasters, malfunctioning equipment, theft, and power failures.
3. Personal valuables insurance: What about the belongings you take when you leave home for work, outings, or on holiday? You can cover this with a personal valuables insurance. Any personal valuables such as laptops, bicycles, cell phones, handbags, sunglasses, etc. will be covered for loss, damage, or theft outside your home.
4. Bond protection insurance: This insurance provides a safety net in the event the bond-payer in a household is unable to pay the bond for any amount of time. If the bond-payer becomes disabled, retrenched, or loses their life, bond protection insurance can kick in, providing peace of mind to the family.
Bond protection insurance varies per policy and nature of circumstances. It can provide monthly bond payments for a specific period of time or settle the outstanding bond balance up to a maximum of a stipulated amount.
Remember, these home insurances don't provide a blanket cover in the event of an incident. Be sure to read the fine print on your policy to understand what protection you have should you need to make a claim.
Best home insurance companies
Search online for insurance providers for your home and you'll discover a range of companies. According to the 2021 Consumer Satisfaction Index, these short-term insurance providers are the top seven for keeping clients happy: OUTsurance, Virseker, Old Mutual Insure, Momentum, Santam, Discovery, and Auto & General.
At the end of the day, you need to choose an insurer based on your own personal needs. Understand what you need from your insurance, shop around for quotes, research the claims history, ratings, and reviews of the insurance providers, and check if any provide discounts or incentives if you sign up with them.
Calculating your home insurance
How much will home insurance cost you? This is a tough question to answer. As a homeowner, insurance providers create a tailored policy that determines how much you pay in monthly premiums. For homeowners insurance, for example, insurance providers will evaluate factors such as your personal circumstance, risk levels, and property value. While you can request quotes, each insurance provider will have handy calculators on their websites to give you rough estimates.
Get advice from property professionals
Insuring your home can be a challenge. Thankfully, buying a home with Seeff ensures you have qualified property professionals to provide helpful home insurance advice and tips. We understand homeownership is more than just a transaction - this is your story - and we are honoured to write this chapter with you.