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Building insurance covers you for destruction or damage to the structure of your home as well as outbuildings, pools, boundary walls, palisade fencing, fixtures and fitting.
Home insurance is a blanket term used to refer to a combination of building, home contents, and portable possessions insurance.
These three forms of insurance are closely related and insurers tend to group them together into packages to lessen the administrative burden and offer lower premiums to customers.
If you’re financing the purchase of a property through any South African bank they will require that you take out insurance. While you’ll likely be offered in-house cover from the bank, you can also shop around and secure the cover with an insurer of your choice.
The only requirement your mortgage provider will have is that you be covered for the actual property replacement value and are therefore not underinsured.
A home loan is a form of secured loan so your house serves as the collateral for your bond and therefore your loan provider requires you to be insured in case of fire, structural or storm damage to your home. They will want to make sure that your loan can be paid either in the form of your insurance payout or the selling of the house once the damage has been repaired.
Insurance is mandatory for home loan approval in South Africa but you are not obligated to take out cover with your home loan provider.
Feel free to shop around for insurance quotes but keep in mind that your home loan provider will check to make sure you have adequate cover as per their own calculations.
Fire, explosions, lightning strikes, natural disasters, weather-related damage and incidents, impact damage caused by animals, people, cars, radio antennae, and other debris, and flooding caused by burst geysers and pipes.
Your insurance covers your physical home, outbuildings, fixtures and fittings and other immovable objects such as built-in cupboards in the event that they’re damaged or destroyed while home contents insurance covers movable home contents like furniture, appliances, and jewellery.
Any damage done to the physical structures of your home as a result of a fire, an explosion, flooding, weather-related incident, or impact damage caused by vehicles, animals, or other debris will be covered by your insurance.
Damage caused by wear and tear or any form of physical deterioration and damage caused by pests and insects such as ants and termites is not covered by insurance. Most insurers will not cover pool cleaning equipment or any loose gravel driveways and paths.
The insurance will also not cover you for any physical damage that occurs as a result of dampness, condensation, or tree roots as this is damage that occurs over a long period of time.
Fixtures and fittings include things such as carpets and tiles, kitchen and bathroom cabinets, faucets, sinks, bathtubs, showers, light fittings, staircases, windows, doors, and built-in wardrobes and shelves.
These are things that would normally remain in the property if you were to sell it or rent it out.
Your monthly premium will be determined based on the property value as well as the type and number of outbuildings you want to have covered. The materials used to build your house will also have a bearing on your premium. Thatch, for example, is often more expensive to insure than a tiled roof structure.
Fitted carpets that cannot be removed will fall under building cover but loose carpets and rugs will be covered under home contents insurance.
Your comprehensive policy should cover the repair or replacement of a geyser as well as any structural damage or damage caused to fixtures and fittings as a result of the burst geyser.
Damage and destruction to solar panels are generally covered by your building insurance policy but normal wear and tear are not.
All sectional title developments are legally required to have buildings insurance and the insurance premiums must be paid via the body corporate which collects the premiums from owners via a monthly levy.
If you live in a sectional title scheme you will pay your portion of structure insurance via your monthly levy.
When taking out insurance it’s crucial not to underinsure your home with the aim of lowering your insurance premiums. Be careful to not over-insure your building either. This can negatively affect your claims.
There are thousands of South Africans who are currently underinsured. If your home is destroyed by a fire or an explosion and you are underinsured you will very likely be unable to rebuild your home as it was.
Excess is a set amount or a percentage of a claim that you will have to pay before your insurer will pay the balance.
The excess on your policy must be specified in the policy schedule and you should take note of this amount before signing your agreement.
There is no law that prohibits you from having two building cover policies for the same property but insurers usually include a dual insurance clause in their policy wording that makes them liable only for a proportionate share of the claim (with the other insurer having to pay their portion).
They may even refund half of your premiums for the entire period that you had dual insurance.
You can submit your claim directly to your insurer by either calling them telephonically, making a claim via an online portal or mobile app or downloading and completing the required documents and sending them back to your insurer for processing.
This kind of claim can take anywhere between a couple of hours to a couple of weeks to payout depending on the event that brought about the claim, the value of the claim, and whether you’ve provided all the required supporting documents.
Most insurers will require that you make a building insurance claim or notify them of any event that may result in a claim within 30 days of the event.
To find out your insurer’s exact policy on the claim notification time period you must check your policy schedule or wording.