Buildings insurance options include comprehensive homeowners cover for loss or damage to buildings caused by fire, explosion, acts of nature, impact, and theft. Picture: Independent Newspapers.
By: Jeanette Marais
Are you thinking of buying a property? It is a big investment and needs careful consideration. Once the finance is approved for your dream home, you need to be able to keep it safe along with the belongings housed within it as well.
If you do take the fiscal plunge and have taken up that bond or home loan, you need to consider the options available to you for buildings insurance, which provides comprehensive homeowners coverage including loss or damage to buildings caused by fire, explosion, acts of nature, impact, and theft.
It is important to insure your building for its replacement value. This is the cost of rebuilding or repairing the building with new materials. Should you insure the building for an amount less than its replacement value, at the claim stage you will be paid an amount proportionate to the insured amount upon validation of the claim, meaning there will be a shortfall should you have been under insured. In South Africa, in the current economic environment, building is usually more expensive than buying a new home on a like-for-like basis. Therefore, using the market value as an approximation for rebuilding cost is almost always too little.
Buildings insurance options include comprehensive homeowners cover for loss or damage to buildings caused by fire, explosion, acts of nature, impact, and theft. In addition, building cover includes the cost of hiring security guards to prevent further damage following an insured event, as well as compensation for amounts owed to local authorities for loss of water due to leaking pipes, for example. Something that is sometimes overlooked is that the cover also extends to the bursting of geysers or water heaters. Since geysers do not last forever, this is a very useful benefit to have.
As important as the actual building is, the contents within your house are also important, and some home contents insurance coverage options include comprehensive contents or contents cover excluding theft. Some extensions automatically include cover for loss or damage caused by incidents such as:
• Power surges or dips.
• Pests and vermin.
• Transportation of belongings, and so much more.
Anyone renting out their property should also consider personal liabilities insurance, which will be useful during a situation where you are legally liable for accidental death or injury to others or accidental loss of, or damage to, property belonging to others. This type of insurance covers legal costs to settle or defend claims against you that occurred at your insured address among other benefits.
Another vitally important tip to take note of when ensuring your home contents is to carefully read your schedule to ensure you understand your responsibilities and to review your contents and the values of the items regularly.
Your home is an extremely valuable asset filled with the valuable items and collective memories of those closest to you, so it is one area for which you do not want to be under- or uninsured. This episode will empower you with the knowledge and advice you need to ensure your home and belongings are adequately covered for any eventuality.
*Jeanette Marais is the Momentum Metropolitan Group CEO.
PERSONAL FINANCE