Insurance tips for new homeowners

Buying a home for the first time can be very exciting, but this new asset also comes with additional responsibilities such as homeowner’s insurance.

Nazeer Hoosen, executive: short term insurance at PPS, says it is imperative for anyone buying their first home to ensure that they have a proper insurance policy in place to protect their newly acquired asset.

“After going through the process of saving up for a deposit, finding the perfect house and getting a mortgage loan approved, new homeowners must ensure they put the same effort into finding the appropriate insurance policy for their specific needs.

“Many people rent flats or share houses for most of their early working years, so they might have some knowledge about home contents insurance, but homeowners insurance may be completely new to them.”

Hoosen says that homeowners insurance can be divided into two parts: building insurance and home contents insurance, with the former covering the construction of the home like the walls, windows or a fitted kitchen.

“It is vital that consumers have building insurance as these structures need to be covered in the case of damage caused by events such as a fire, flood or storm. The policy will also cover theft and malicious damage to fixtures and fittings.”

Contents insurance will cover the belongings inside the home such as appliances, furniture and electronics.

“You can claim for contents insurance in case of fire and floods as well, but contents insurance will also cover your belongings in the unfortunate event of damage or theft. For these reasons it is strongly advised that homeowners have both building and contents as part of an overall home insurance policy.”

If you already have contents insurance in place for your belongings, it may be advisable to take out building insurance with the same provider as many insurers offer discounted premiums when the value of the policy increases, says Hoosen.

“In some instances, you will be offered insurance from the bank that granted your home loan, but it is important to consider other insurance providers and policy options. Although it is good to speak to relatives and friends about their experience with their insurance providers it is still advisable to speak to a broker to get optimal insurance at the best price,” says Hoosen.

“It is also imperative that a proper assessment is carried out before the insurance policy is finalised to ensure that you are not underinsured. If at the claims stage it is found that the home and contents are not sufficiently insured for the replacement value, you will be left with the financial burden of having to pay the difference between the sum insured that is reflected in the policy and the actual replacement value.”

Lastly, Hoosen says that it is essential to completely understand your home insurance policy before you sign the contract.

“Ask the insurance broker to explain any complex clauses and jargon to ensure complete understanding of the policy. This will also ensure that you won’t face insurance claim repudiations due to not understanding what is covered under your chosen policy and what is not.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    • 16 Jan 2018
      The start of the new year is symbolic of new beginnings. A good time to take stock of one’s possessions as well as how necessary they actually are. However, seeing as the process may appear daunting – a plan goes a long way.
    • 16 Jan 2018
      The Western Cape is still in the throes of a severe drought and many households have to adjust the way they use and save water. It is a little more complicated in sectional title schemes, however, as it is not that easy to implement grey water systems for multiple users and it is also difficult to monitor water usage accurately if there are no separate water meters
    • 15 Jan 2018
      In ideal rental situations, when a lease is signed the tenant will stay for the full duration of his lease without any complications and the landlord will uphold his obligations, creating a win-win situation for tenant and landlord.
    • 15 Jan 2018
      The Atlantic Seaboard’s housing market has stoically withstood the brunt of the growing economic and political instability, consistently achieving double digit growth way above the national average, however, in 2017 South Africa’s most resilient market finally began to yield to the pressure.
    • 15 Jan 2018
      Sectional title insurance can be a little confusing and, as a new owner, you may be tempted to just assume your body corporate has you covered. While this may be the case, understanding the extent of your coverage and your personal liability is the only guaranteed way to protect yourself against potentially costly oversights.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us