Homeowner's insurance need-to-know

Always keep your insurance policy in such a state that, if you need to make a claim, your insurance company does not find a single loophole not to pay you out in full.

We are continuously being hit by various acts of nature, such as earthquakes, storms, floods, hail, lightning and landslides. Homeowners need to be prepared for any severe climate change, which could affect their precious investment.

What is homeowner's or building insurance?

Essentially your home’s physical structure and outbuildings; all the permanent fixtures, fittings and improvements such as driveways, walls, the roof, garages, fences, patios, swimming pools, borehole and spa pumps, gate motors, tennis courts, underground pipes and cables.

When will you be covered?

When misfortune knocks at your door, you need to ensure that your home’s structure or permanent fittings can be rebuilt or repaired. Homeowner's or building insurance will cover you for damage caused by:

1. Theft and attempted theft

2. Malicious damage

3. Fire or explosion

4. Acts of nature such as wind, lightning, storms, hail, flood, snow

5. Earthquakes

6. Burst, leaking or overflowing geysers or water-heating systems and water pipes

7. Impact caused by vehicles, falling trees and aircrafts

8. Animals

9. Power surges and dips

10. In certain cases, political activities

Being under- and over-insured

Under-insurance is when your insurance cover is less than what it would cost to replace your damaged property. You end up having to cover part of the damage yourself.

Over-insurance on the other hand, is when your insurance cover is more than what it would cost to replace your damaged property. You end up paying too much in premiums since the market value of your property will be less than the insured amount. Avoid being under-insured or over-insured and aim for insuring your property for the correct value. It remains your responsibility, and only you can lose out when disaster strikes.

Property owners need to remember that insurance is a personal choice. You have a right to shop around for the best insurance cover that will meet your unique needs, whether you took a mortgage or not. Financial institutions automatically include homeowner's insurance when they issue a mortgage, but it is not compulsory to accept it.

Take charge of your finances. Do your own research. Ask your mortgage originator, as they are independent from banks and insurance companies. Shop around and compare quotes, cover, claims procedures and ensure that you understand what is not covered, understand the insurance terminology and how much your excess is before making your choice.

Once you have taken the cover, ensure that you have everything in writing. Do not forget to keep your cover updated and relevant to your current financial situation.

Always keep your insurance policy in such a state that, if you need to make a claim, your insurance company does not find a single loophole not to pay you out in full. You can only achieve this by taking a hands-on approach to all kinds of insurance you take out. 

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