Is yours covered for every eventuality?
No one likes to think about things that could go wrong, but it's vital that your home is covered for any eventuality. Seeff takes a closer look at home versus household insurance.
Your home is your most important asset, a significant financial investment and burden and must be protected. There are two types of insurance; the first being Home Owners Insurance which covers the property and, the second, being Household Insurance that covers the movable contents of your home and your personal belongings.
Homeowners Insurance aims to protect you financially against any possible loss or damage to the property and its permanent fixtures, from built-in cupboards and toilets to baths and geysers. Imagine a scenario where you don’t have insurance and your home is struck by fire and burns down; not only have you lost your biggest asset, but you will also still be liable to pay back your home loan in full.
While natural disasters such as a fire or house flood might seem a bit far-fetched, it is vital that you are covered. The same applies to an accidental window breakage. Let’s say a stone or cricket ball comes flying out of nowhere and breaks your window or expensive glass door. The same with your geyser, it might suddenly burst and you end up with major water damage.
What is also important to remember is that when a property is financed, you are required to have homeowners insurance. You do not need to feel pressured into accepting insurance with the bank that is granting your loan and are free to shop around for your insurance, but it would need to meet with the approval of the bank.
It is critically important though that you go through the policy with a fine tooth comb to ensure that all aspect of the structure and fixtures and fittings are covered for all eventualities. You may also need to take extra SASRIA insurance to cover accidental or deliberate damage to your property caused by any person or group taking part in a riot, strike, lock-out or civil commotion.
Household Insurance covers your movable household contents and personal belongings against possible loss or damage caused by accidents, fire or theft. This includes items in your home like appliances or electronic goods. Without reliable insurance, replacing household items could be costly. Before shopping around for household insurance, make a list of the contents and how much it would cost to replace each item, then add everything together and determine your total replacement value that would need to be insured.
Again, be sure to check your policy very carefully to ensure that all items are covered. In some instances, you have to provide an inventory of your goods, sometimes even photographs. There may also be requirements such as an alarm system, keeping vehicles in a locked garage and so on; so it is vital that you check your policy to see what the insurance company requires.
Household insurance should cover any theft or attempted theft causing loss or damage following forcible or violent entry into the property. Your insurance package should also include damage from things like fire, lightning or explosions, natural disasters like floods or earthquakes, electrical or water system failures like a burst geyser or pipe and then also outside influences like a car driving through your property or a tree falling.
Be sure to do your research before making a final decision on which insurance company to use. Ask family and friends for referrals and seek advice from your real estate agent who are also able to provide valuable insight, helping you make an informed decision.
This article is intended to provide a general guide and not specialist advice. Specialist advice should be sought about your specific circumstances.