Essential insurance for homeowners
Buying a home comes with a host of financial responsibilities, such as paying your bond regularly and ensuring that you have selected appropriate insurance to cover your debt, should your circumstances change.
In fact, your bank will probably insist that you have life insurance and homeowners insurance, to cover the bond debt if something happens to you, and to ensure that you are protected from the expense of repairs to the structure of your house if anything should happen to it. It is however worth knowing that you don’t have to take out your bank’s cover – you can buy insurance from anywhere, so shop around for a competitive quote.
Below, Craig Young, ooba’s Managing Executive for Insurance discusses the different types of insurance you will need as a homeowner.
Buildings insurance Buildings insurance is one of the most important policies you will purchase. It covers the structure of your home as well as all the permanent fixtures and fittings in it, against damage caused as a result of unexpected events like fire, flood and lightning. For instance, if your geyser bursts, your buildings insurance will cover the costs of repair and damages, with certain exclusions.
For buildings insurance, the structure of your house – what the building and the roof are made of – as well as the type of residency – holiday home or permanent residence – all play a role in the risk assessment and therefore, the cost of your premiums. This type of cover will always be subject to exclusions and excesses, but will cover the bulk of your expenses if the loss forms part of an insured event.
Bond protection insurance It is very important to consider what would happen to you and your family if, for some reason, you were unable to pay your bond for any period of time. Bond protection insurance provides comprehensive cover in the event of death, disability, dread disease or retrenchment.
For bond protection insurance, your premiums are determined in line with various socio-economic factors which include monthly income, age, gender, smoker status and level of education.
Contents insurance As a homeowner, you’ll also want to protect the contents of your house. For this reason, you’ll want to buy household contents insurance that will cover you in the event of a burglary or other events related to contents such as water damage, fire damage, refrigerator/deep freeze and audio visual equipment and glass to name but a few.
The costs of contents insurance are based on the value of the contents of your home. Do a realistic valuation when you request an insurance quote because if you under-value the contents, should you become the victim of theft, there will be a shortfall in your pay-out.